EXHIBIT 10.2
------------
EXECUTION VERSION
TERM LOAN AND GUARANTY AGREEMENT
dated as of March 20, 2007
among
FEDDERS NORTH AMERICA, INC.,
FEDDERS CORPORATION,
as Holdings and a Guarantor,
CERTAIN SUBSIDIARIES OF FEDDERS CORPORATION,
as Guarantors,
VARIOUS LENDERS,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Sole
Lead Arranger, Sole Bookrunner and Sole Syndication Agent,
and
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Administrative Agent and Collateral Agent,
--------------------------------------------------------
$50,000,000 Senior Secured Term Loan Facility
--------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1.
DEFINITIONS AND INTERPRETATION..........................1
1.1.
Definitions......................................................1
1.2.
Accounting
Terms.................................................24
1.3.
Interpretation,
etc..............................................24
SECTION 2.
TERM LOANS..............................................25
2.1.
Term
Loan Commitments.............................................25
2.2.
Borrowing Mechanics for Term
Loans................................25
2.3.
Notes.............................................................25
2.4.
Pro
Rata Shares; Availability of
Funds............................25
2.5.
Use
of
Proceeds...................................................26
2.6.
Evidence of Debt; Register; Lenders' Books and
Records............26
2.7.
Interest on Term
Loans............................................26
2.8.
Conversion/Continuation...........................................28
2.9.
Default
Interest..................................................28
2.10.
Fees..............................................................28
2.11.
Scheduled
Payments................................................29
2.12.
Voluntary
Prepayments.............................................29
2.13.
Mandatory
Prepayments.............................................30
2.14.
Call
Premium......................................................31
2.15.
Application of
Prepayments........................................31
2.16.
General
Provisions Regarding Payments.............................31
2.17.
Ratable
Sharing...................................................32
2.18.
Making or
Maintaining Eurodollar Rate Loans.......................33
2.19.
Increased
Costs; Capital Adequacy.................................34
2.20.
Taxes;
Withholding, etc...........................................35
2.21.
Obligation
to Mitigate............................................37
2.22.
Removal or
Replacement of a Lender................................37
SECTION 3.
CONDITIONS PRECEDENT....................................38
3.1. Closing
Date........................................................38
SECTION 4.
REPRESENTATIONS AND WARRANTIES..........................43
4.1.
Organization; Requisite Power and Authority;
Qualification.....................................................43
i
<PAGE>
TABLE OF CONTENTS
(Continued)
Page
4.2.
Capital Stock and
Ownership.......................................43
4.3.
Due
Authorization.................................................43
4.4.
No
Conflict.......................................................43
4.5.
Governmental
Consents.............................................44
4.6.
Binding
Obligation................................................44
4.7.
Historical Financial
Statements...................................44
4.8.
Projections.......................................................44
4.9.
No
Material Adverse
Change........................................44
4.10.
No
Restricted Junior
Payments.....................................45
4.11.
Adverse
Proceedings, etc..........................................45
4.12.
Payment of
Taxes..................................................45
4.13.
Properties........................................................45
4.14.
Environmental
Matters.............................................45
4.15.
No
Defaults.......................................................46
4.16.
Material
Contracts................................................46
4.17.
Governmental
Regulation...........................................46
4.18.
Margin
Stock......................................................46
4.19.
Employee
Matters..................................................46
4.20.
Employee
Benefit Plans............................................47
4.21.
Certain
Fees......................................................48
4.22.
Solvency..........................................................48
4.23.
Compliance
with Statutes, etc.....................................48
4.24.
Disclosure........................................................48
4.25.
Patriot
Act.......................................................48
SECTION 5.
AFFIRMATIVE COVENANTS...................................49
5.1.
Financial Statements and Other
Reports............................49
5.2.
Existence.........................................................53
5.3.
Payment of Taxes and
Claims.......................................53
5.4.
Maintenance of
Properties.........................................53
5.5.
Insurance.........................................................53
ii
<PAGE>
TABLE OF CONTENTS
(Continued)
Page
5.6.
Books and Records;
Inspections....................................54
5.7.
Lenders
Meetings..................................................54
5.8.
Compliance with
Laws..............................................54
5.9.
Environmental.....................................................54
5.10.
Subsidiaries......................................................56
5.11.
Additional
Real Estate Assets.....................................56
5.12.
Further
Assurances................................................56
5.13.
Miscellaneous Business
Covenants..................................57
5.14.
Landlord
Waivers..................................................57
5.15.
Control
Accounts; Approved Deposit Accounts.......................57
5.16.
Post-Closing Obligations with respect to Foreign
Collateral.......58
SECTION 6.
NEGATIVE COVENANTS......................................59
6.1.
Indebtedness......................................................59
6.2.
Liens.............................................................61
6.3.
Equitable
Lien....................................................63
6.4.
No
Further Negative
Pledges.......................................63
6.5. Restricted
Junior Payments........................................63
6.6.
Restrictions on Subsidiary
Distributions..........................64
6.7.
Investments.......................................................64
6.8.
Financial
Covenants...............................................65
6.9.
Fundamental Changes; Disposition of Assets;
Acquisitions..........66
6.10.
Disposal
of Subsidiary Interests..................................68
6.11.
Sales and
Lease-Backs.............................................68
6.12.
Transactions with Shareholders and
Affiliates.....................68
6.13.
Conduct of
Business...............................................68
6.14.
Permitted
Activities of Holdings..................................68
6.15.
Amendments
or Waivers of Organizational Documents
and Senior Notes
Documents........................................69
6.16.
Fiscal
Year.......................................................69
6.17.
No
Speculative
Transactions.......................................69
iii
<PAGE>
TABLE OF CONTENTS
(Continued)
Page
6.18.
Margin
Regulations................................................69
SECTION 7.
GUARANTY................................................69
7.1.
Guaranty of the
Obligations.......................................69
7.2.
Contribution by
Guarantors........................................69
7.3.
Payment by
Guarantors.............................................70
7.4.
Liability of Guarantors
Absolute..................................70
7.5.
Waivers by
Guarantors.............................................72
7.6.
Guarantors' Rights of Subrogation, Contribution,
etc..............72
7.7.
Subordination of Other
Obligations................................73
7.8.
Continuing
Guaranty...............................................73
7.9.
Authority of Guarantors or
Borrower...............................73
7.10.
Financial
Condition of Borrower...................................73
7.11.
Default,
Remedies.................................................74
7.12.
Bankruptcy,
etc...................................................74
7.13.
Waiver of
Judicial Bond...........................................74
7.14.
Discharge
of Guaranty Upon Sale of Guarantor......................75
7.15.
Indemnity.........................................................75
SECTION 8.
EVENTS OF DEFAULT.......................................75
8.1.
Events of
Default.................................................75
8.2.
Borrower's Right to Cure Minimum EBITDA Covenant
Default..........78
SECTION 9.
AGENTS..................................................78
9.1.
Appointment of
Agents.............................................78
9.2.
Powers and
Duties.................................................79
9.3.
General
Immunity..................................................79
9.4.
Agents Entitled to Act as
Lender..................................80
9.5.
Lenders' Representations, Warranties and
Acknowledgment...........81
9.6.
Right to
Indemnity................................................81
9.7.
Successor Administrative Agent and Collateral
Agent...............81
9.8.
Collateral Documents and
Guaranty.................................82
SECTION 10.
MISCELLANEOUS...........................................82
iv
<PAGE>
TABLE OF CONTENTS
(Continued)
Page
10.1.
Notices..........................................................82
10.2.
Expenses.........................................................83
10.3.
Indemnity........................................................84
10.4.
Set-Off..........................................................84
10.5.
Amendments
and Waivers...........................................84
10.6.
Successors
and Assigns; Participations...........................85
10.7.
Independence of
Covenants........................................88
10.8.
Survival
of Representations, Warranties and Agreements...........88
10.9.
No Waiver;
Remedies Cumulative...................................88
10.10.
Marshalling;
Payments Set Aside..................................89
10.11.
Severability.....................................................89
10.12.
Obligations
Several; Independent Nature of
Lenders'
Rights..................................................89
10.13.
Headings..........................................................89
10.14.
APPLICABLE
LAW....................................................89
10.15.
CONSENT TO
JURISDICTION...........................................89
10.16.
WAIVER OF JURY
TRIAL..............................................90
10.17.
Confidentiality...................................................90
10.18.
Usury Savings
Clause..............................................91
10.19.
Counterparts......................................................92
10.20.
Effectiveness.....................................................92
10.21.
Patriot
Act.......................................................92
10.22.
Electronic
Execution of Assignments...............................92
10.23.
Joint and
Several Liability.......................................92
10.24.
Judgment
Currency.................................................92
v
<PAGE>
TABLE OF CONTENTS
(Continued)
APPENDICES: A
Term Loan Commitments
B
Notice Addresses
SCHEDULES:
3.1(h) Closing
Date Mortgaged Properties
4.1
Jurisdictions of Organization and Qualification
4.2 Capital
Stock and Ownership
4.13
Real Estate Assets
4.20
Benefits to Retired or Former Employees
5.18
Certain Other Post-Closing Obligations
6.1 Certain
Indebtedness
6.2 Certain
Liens
6.6 Certain
Restrictions on Subsidiary Distributions
6.7 Certain
Investments
6.12
Certain Affiliate Transactions
8.1(k) Environmental Matters
EXHIBITS: A-1 Funding
Notice
A-2
Conversion/Continuation Notice
B
Note
C
Compliance Certificate
D-1 Opinion of
Skadden, Arps, Slate, Meagher & Flom LLP,
special counsel
D-2 Opinion of
Landry & Ludewig, LLP, New Mexico counsel
D-3 Opinion of
Ballard, Spahr, Andrews & Ingersoll, LLP,
Pennsylvania counsel
D-4 Opinion of
Fasken Martineau DuMoulin LLP, Canada counsel
E
Assignment and Assumption Agreement
F
Certificate Re Non-bank Status
G-1 Closing
Date Certificate
G-2 Solvency
Certificate
H
Counterpart Agreement
I
Pledge and Security Agreement
J
Mortgage (Fee/Leasehold)
K
Landlord Waiver and Consent Agreement
L
Intercreditor
Agreement
vi
<PAGE>
TERM LOAN AND GUARANTY AGREEMENT
This TERM LOAN AND GUARANTY AGREEMENT, dated as of March 20, 2007, is
entered into by and among FEDDERS NORTH AMERICA, INC., a Delaware corporation
("Borrower"), FEDDERS
CORPORATION,
as Holdings
and a Guarantor, a Delaware
corporation
("Holdings"), CERTAIN
SUBSIDIARIES
OF FEDDERS CORPORATION, as
Guarantors, Lenders
party hereto from time
to time, and GOLDMAN
SACHS CREDIT
PARTNERS L.P.
("GSCP"), as Sole Lead Arranger, Sole Bookrunner and Sole
Syndication
Agent (in such capacity, "Syndication Agent"), GSCP, as
Administrative Agent
(together with its permitted successors in such capacity,
"Administrative
Agent") and as Collateral Agent (together with its permitted
successor in such capacity, "Collateral Agent").
RECITALS:
WHEREAS, capitalized
terms used in these Recitals shall have the
respective meanings set forth for such terms in Section 1.1
hereof;
WHEREAS, Lenders
have agreed to extend a term loan facility to
Borrower, in an
aggregate amount not to exceed $50,000,000, the proceeds of
which will
be used to
refinance the Refinanced Indebtedness in full (the
"Refinancing"), to pay
the Senior Notes Interest Payment, to pay related
transaction costs and expenses and for general corporate
purposes;
WHEREAS, Borrower
has agreed to secure all of its Obligations by
granting to
Collateral
Agent, for the benefit of Secured Parties, a First
Priority Lien on the Fixed Asset Collateral and a Second Priority Lien on the
Current Asset Collateral; and
WHEREAS, Guarantors
have agreed to guarantee the obligations of
Borrower hereunder and
to secure their
respective Obligations
by granting to
Collateral Agent, for the benefit of the Secured Parties,
a First Priority
Lien
on the Fixed Asset
Collateral and a
Second Priority Lien
on the Current Asset
Collateral.
NOW, THEREFORE,
in consideration of
the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1 DEFINITIONS
AND INTERPRETATION
1.1.
Definitions.
The following terms used herein, including in the
preamble, recitals,
exhibits and
schedules hereto, shall have the following
meanings:
"Account Debtor"
as defined in the UCC and includes any Person
obligated in respect of an Account.
"Accounts" as defined in the UCC.
"Adjusted Eurodollar
Rate" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan,
the rate per
annum obtained by
dividing (and rounding
upward to the next whole multiple of
1/16 of 1%) (i) (a) the rate per annum (rounded to the nearest 1/100 of 1%)
equal to the rate
determined by
Administrative
Agent to be the
offered rate
which appears on the
page of the Telerate
Screen which displays an average
British Bankers Association Interest Settlement Rate (such
page currently being
page number 3740 or 3750, as applicable) for deposits (for delivery
on the first
day of such period) with a term equivalent to such period in
Dollars, determined
as of
<PAGE>
approximately
11:00 a.m.
(London, England time) on such Interest Rate
Determination Date,
or (b) in the event
the rate referenced
in the preceding
clause (a) does not
appear on such page or
service or if such
page or service
shall cease to be available, the rate per annum (rounded to the
nearest 1/100 of
1%) equal to the rate determined by Administrative Agent to be the offered rate
on such other page or other service which displays an average British Bankers
Association Interest Settlement Rate for deposits (for delivery on
the first day
of such period) with a term equivalent to such period in Dollars,
determined as
of approximately
11:00 a.m. (London, England time) on such Interest Rate
Determination Date,
or (c) in the event
the rates referenced
in the preceding
clauses (a) and (b)
are not available,
the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the offered quotation rate to first
class banks in
the London interbank
market by GSCP for deposits (for delivery on the first day
of the relevant
period) in Dollars of amounts in same day funds comparable to
the principal amount of the applicable Term Loan of Administrative
Agent, in its
capacity as a Lender,
for which the
Adjusted Eurodollar Rate is then being
determined with maturities comparable to such period as of
approximately
11:00
a.m. (London, England time) on such Interest Rate Determination
Date, by (ii) an
amount equal to (a) one minus (b) the Applicable Reserve
Requirement.
"Administrative Agent" as defined in the preamble hereto.
"Adverse Proceeding"
means any action, suit, proceeding (whether
administrative,
judicial or
otherwise),
governmental
investigation
or
arbitration (whether
or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity, or before or by any Governmental
Authority,
domestic or foreign (including any Environmental Claims), whether
pending or, to
the knowledge
of Holdings or any of
its Subsidiaries,
threatened
against or
affecting Holdings or any of its Subsidiaries or any property of
Holdings or any
of its Subsidiaries.
"Affected Lender" as defined in Section 2.18(b).
"Affected Term Loans" as defined in Section 2.18(b).
"Affiliate" means, as applied to any Person, any other Person
directly
or indirectly
controlling,
controlled by, or under common control with, that
Person. For
the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and
"under common
control with"),
as applied to any
Person, means the
possession,
directly or
indirectly, of the
power (i) to vote 5% or more of the Securities having
ordinary voting
power for the
election of directors
of such Person or (ii) to
direct or cause the
direction of the
management
and policies of that
Person,
whether through the ownership of voting securities or by contract
or otherwise.
"Agent" means each of
Administrative
Agent, Syndication Agent and
Collateral Agent.
"Aggregate Amounts Due" as defined in Section 2.17.
"Aggregate Payments" as defined in Section 7.2.
"Agreement" means this Term Loan and Guaranty Agreement, dated as of
March 20, 2007, as it may be amended, supplemented or otherwise modified from
time to time.
"Applicable Financial
Plan" means,
for the purposes of
agreeing and
determining any
financial covenant
levels pursuant to Section 6.8, the
first
Financial Plan delivered after the Closing Date pursuant to Section
5.1(i).
2
<PAGE>
"Applicable
Reserve
Requirement" means,
at any time, for any
Eurodollar Rate Loan,
the maximum rate, expressed as a decimal, at which
reserves
(including,
without limitation,
any basic marginal, special,
supplemental,
emergency or other
reserves) are required to be maintained with
respect thereto against "Eurocurrency liabilities" (as such term is
defined in
Regulation D)
under regulations issued from time to time by the Board of
Governors or other applicable banking regulator. Without limiting the effect of
the foregoing,
the Applicable Reserve Requirement shall reflect any other
reserves required to
be maintained by such member banks with respect to (i) any
category of
liabilities
which includes deposits by reference to which the
applicable Adjusted
Eurodollar Rate or any
other interest rate of a Loan is to
be determined,
or (ii) any
category of
extensions
of credit or other
assets
which include
Eurodollar Rate Loans.
A Eurodollar Rate Loan shall be deemed to
constitute
Eurocurrency
liabilities and as
such shall be deemed
subject to
reserve requirements
without benefits of credit for proration,
exceptions or
offsets that may be available from time to time to the
applicable Lender.
The
rate of interest on Eurodollar Rate Loans shall be adjusted
automatically on and
as of the effective date of any change in the Applicable Reserve
Requirement.
"Approved Deposit Account" means a Deposit Account that is the
subject
of an effective
Deposit Account Control Agreement and that is maintained by any
Credit Party with a Deposit Account Bank. "Approved Deposit Account" includes
all monies on deposit in a Deposit Account and all certificates and
instruments,
if any, representing or evidencing such Deposit Account.
"Approved Securities Intermediary" means a "securities intermediary",
"commodity intermediary" or "futures intermediary" (as such terms
are defined in
the UCC) selected or approved by Administrative Agent; it being understood and
agreed that the "securities intermediaries", "commodities intermediaries" and
"futures
intermediaries" of the Credit Parties on the Closing Date are
Approved
Securities Intermediaries.
"Asset Sale"
means a sale, lease or sub-lease (as lessor or
sublessor), sale
and leaseback, assignment, conveyance, transfer or other
disposition to, or any
exchange of property with, any Person (other than
Borrower or any
Guarantor Subsidiary), in one transaction or a series of
transactions, of all
or any part of Holdings' or any of its Subsidiaries'
businesses, assets or
properties of any kind, whether real, personal, or mixed
and whether tangible
or intangible,
whether now owned or
hereafter
acquired,
including,
without
limitation, the
Capital Stock of any of Holdings'
Subsidiaries, other
than (i) inventory sold or leased in the ordinary course of
business (excluding any such sales by operations or divisions
discontinued or to
be discontinued), and
(ii) sales of other assets for aggregate consideration of
less than $100,000
with respect to any transaction or series of related
transactions and less than $250,000 in the aggregate during any
Fiscal Year.
"Assignment Agreement"
means an Assignment
and Assumption
Agreement
substantially in the form of Exhibit E, with such amendments or
modifications as
may be approved by Administrative Agent.
"Assignment Effective Date" as defined in Section 10.6(b).
"Authorized Officer"
means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer),
chief executive
officer, president or
one of its vice
presidents (or the equivalent thereof),
and such Person's chief financial officer or treasurer.
"Bankruptcy Code"
means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor
statute.
3
<PAGE>
"Base Rate" means, for
any day, a rate per annum equal to the greater
of (i) the Prime Rate in effect on such day and (ii) the Federal
Funds Effective
Rate in effect on such day plus 1/2 of 1%. Any change in the Base Rate due to
a
change in the Prime Rate or the Federal Funds Effective Rate shall be
effective
on the effective
day of such
change in the Prime
Rate or the
Federal Funds
Effective Rate, respectively.
"Base Rate Loan" means a Loan bearing interest at a rate determined
by
reference to the Base Rate.
"Beneficiary" means each Agent, Lender and Lender Counterparty.
"Blockage Notice"
means a notice of "control" (as defined in the UCC)
contemplated to be delivered pursuant to each Deposit Account
Control Agreement.
"Board of Governors" means the Board of Governors of the United
States
Federal Reserve System, or any successor thereto.
"Borrower" as defined in the preamble hereto.
"Business Day" means
(i) any day excluding
Saturday, Sunday and
any
day which is a legal holiday under the laws of the State of New
York or is a day
on which banking
institutions located
in such state are authorized or required
by law or other
governmental action
to close and (ii) with respect to all
notices,
determinations,
fundings and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, the term "Business
Day" shall mean
any day which is a Business Day described in clause (i) and which
is also a day
for trading by and
between banks in
Dollar deposits
in the London
interbank
market.
"Canadian Subsidiary"
means any existing or subsequently acquired or
organized Subsidiary
of Holdings organized under the laws of Canada or any
political subdivision thereof including, Fedders Canada.
"Capital Lease"
means, as applied to any Person, any lease of any
property (whether
real, personal or mixed) by that Person
as lessee that, in
conformity with GAAP,
is or should be
accounted for as a
capital lease on the
balance sheet of that Person.
"Capital Stock" means any and all shares, interests, participations
or
other equivalents
(however designated)
of capital stock of a corporation, any
and all equivalent
ownership interests in
a Person (other than a corporation),
including, without limitation, partnership interests, trust units
and membership
interests, and any and
all warrants,
rights or options to
purchase or other
arrangements or rights to acquire any of the foregoing.
"Cash" means
money, currency or a credit balance in any demand or
Deposit Account.
"Cash Collateral
Account" means any Deposit Account or Securities
Account that is (a)
established
by any Agent from time to time in its sole
discretion to
receive cash and Cash Equivalents (or purchase cash or Cash
Equivalents with funds
received) from the Credit Parties or Persons
acting on
their behalf pursuant to the Credit Documents, (b) with such depositaries and
securities
intermediaries as such
Agent may determine in its sole discretion,
(c) in the name of Collateral Agent (although such account may also
have words
referring to Borrower and the account's purpose), (d) under the control,
and
subject to a First Priority perfected Lien, of Collateral
Agent and (e) in
the
case of a Securities
Account, with
4
<PAGE>
respect to which Collateral Agent shall be the Entitlement
Holder and the
only
Person authorized to give Entitlement Orders with respect
thereto.
"Cash Equivalents"
means, as at any date
of determination,
(i) any
evidence of Indebtedness with a maturity date of ninety (90) days
or less issued
or directly and fully
guaranteed or insured
by the United States of America or
the Government of
Canada or any agency or instrumentality thereof; provided,
that, the full
faith and credit of the United States of America or the
Government of
Canada, as applicable, is pledged in support thereof; (b)
certificates of deposit or bankers' acceptances with a maturity of ninety (90)
days or less of any
financial institution
that is a member of the Federal
Reserve System or a
bank listed on Schedule I of the Bank Act (Canada) having
combined capital
and surplus and undivided profits of not less than
$1,000,000,000; (c) commercial paper (including variable rate
demand notes) with
a maturity
of ninety (90) days or less issued by a corporation (except an
Affiliate of Borrower or Guarantor) organized under the laws of any
State of the
United States of
America or the
District of Columbia and rated at least A-1 by
S&P or at least P-1 by Moody's; (d) repurchase obligations with a term of not
more than thirty (30) days for underlying securities of the types
described in
clause (a) above entered into with any financial institution having combined
capital and surplus and undivided profits of not less than
$1,000,000,000;
(e)
repurchase agreements
and reverse repurchase
agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the United States
of
America or issued by
any governmental
agency thereof and backed by the full
faith and credit of the United States of America, in each case maturing within
ninety (90) days or less from the date of acquisition; provided,
that, the terms
of such agreements comply with the guidelines set forth in the
Federal Financial
Agreements of Depository Institutions with Securities Dealers and Others, as
adopted by the
Comptroller
of the Currency on October 31, 1985; and (f)
investments in money
market funds and
mutual funds which invest substantially
all of their assets in securities of the types described in clauses (a)
through
(e) above.
"Certificate re Non-Bank Status" means a certificate substantially in
the form of Exhibit F.
"Change of Control" means, at any time, (i) any Person or
"group"
(within the meaning of Rules 13d-3 and 13d-5 under the Exchange
Act) (a) shall
have acquired beneficial ownership of a majority on a fully diluted
basis of
the voting and/or economic interest in the Capital Stock of
Holdings or (b)
shall have obtained the power (whether or not exercised) to elect a
majority
of the members of the board of directors (or similar governing
body) of
Holdings, in each case[*]; (ii) the majority of the seats (other
than vacant
seats) on the board of directors (or similar governing body) of
Holdings cease
to be occupied by Persons who either (a) were members of the board
of
directors of Holdings on the Closing Date or (b) were nominated for
election
by the board of directors of Holdings, a majority of whom were
directors on
the Closing Date or whose election or nomination for election was
previously
approved by a majority of such directors; (iii) Holdings shall
cease to
beneficially own and control 100% on a fully diluted basis of the
economic and
voting interest in the Capital Stock of Borrower, Fedders
International, Inc.
or Fedders Investment Corporation, unless as a result of a
transaction
expressly permitted under Section 6.9 or Section 6.10; (iv)
Borrower shall
cease to beneficially own and control directly or indirectly 100%
(or, in the
case of Islandaire and Islandaire Metal Fabricating Inc., (1) prior
to
Borrower's purchase of the remaining 20% of the Capital Stock of
Islandaire
and Islandaire Metal Fabricating Inc., 80% and (2) after such
purchase, 100%)
on a fully diluted basis the economic and voting interest in the
Capital Stock
of any Guarantor Subsidiary, unless as a result of a transaction
expressly
permitted under Section 6.9 or Section 6.10; or (v) any "change of
control" or
similar event under the Revolving Credit Agreement or the Senior
Notes
Indenture shall occur.
"Closing Date" means the date on which the Term Loans are made,
which
occurred on March 20, 2007.
-----------------
* Confidential
information has been omitted pursuant to a request to the
Securities
and Exchange Commission for confidential treatment. The
information has been separately filed with the Commission.
5
<PAGE>
"Closing Date
Certificate"
means
a Closing Date Certificate
substantially in the form of Exhibit G-1.
"Closing Date Mortgaged Property" as defined in Section 3.1(h).
"Collateral" means, collectively, all of the real, personal and
mixed
property (including
Capital Stock) in which Liens are
purported to be granted
pursuant to the Collateral Documents as security for the
Obligations.
"Collateral Agent" as defined in the preamble hereto.
"Collateral Documents"
means the Pledge and Security Agreement, the
Mortgages, all
executed Deposit Account Control Agreements, Securities Account
Control Agreements and Intellectual Property Security Agreements of
Borrower or
the Guarantors, the
Landlord Personal Property Collateral Access Agreements, if
any, and all other instruments, documents and agreements delivered
by any Credit
Party pursuant to this
Agreement or any of the other Credit Documents in order
to grant to Collateral Agent, for the benefit of Secured Parties,
a Lien on any
real, personal
or mixed property of such Credit Party as security for the
Obligations or to preserve, protect or perfect such Lien.
"Collateral Questionnaire" means a certificate in form satisfactory
to
Collateral Agent that provides information with respect to the
personal or mixed
property of each Credit Party.
"Commodity Account" has the meaning given such term in the UCC.
"Compliance Certificate" means a Compliance Certificate
substantially
in the form of Exhibit C.
"Consolidated Adjusted
EBITDA" means, for any period, an amount
determined for Holdings and its Subsidiaries on a consolidated basis equal to
(i) the sum,
without duplication, of the amounts for such period of (a)
Consolidated Net Income, (b) Consolidated Interest Expense, (c) provisions for
taxes based on income,
(d) total depreciation
expense, (e) total
amortization
expense, (f)
extraordinary and non-recurring charges (including restructuring
charges not
exceeding $5,000,000 in any Fiscal Year and $7,500,000 in the
aggregate) and (g)
other non-Cash items reducing Consolidated Net Income
(excluding any such non-Cash item to the extent that it represents
an accrual or
reserve for
potential Cash items in any future
period or amortization of a
prepaid Cash item that was paid in a prior period), minus (ii) the sum, without
duplication, for such
period of (a) extraordinary and non-recurring income and
gains and (b) other non-Cash items increasing Consolidated Net Income for
such
period (excluding
any such non-Cash item to the extent it represents the
reversal of an accrual or reserve for potential Cash item in any
prior period).
"Consolidated
Capital Expenditures"
means, for any period, the
aggregate of all
expenditures
of Holdings
and its Subsidiaries during such
period determined on a consolidated basis that, in accordance with
GAAP, are or
should be included in
"purchase of property
and equipment"
or similar
items
reflected in the
consolidated
statement of cash flows of Holdings and its
Subsidiaries.
"Consolidated Current
Assets" means, as at any date of determination,
the total assets of Holdings and its Subsidiaries on a consolidated
basis that
may properly be classified as current assets in conformity with
GAAP, excluding
Cash and Cash Equivalents.
6
<PAGE>
"Consolidated
Current
Liabilities"
means, as at any date of
determination, the
total liabilities
of Holdings
and its Subsidiaries on a
consolidated basis
that may properly be
classified as current
liabilities in
conformity with GAAP, excluding the current portion of long term
debt.
"Consolidated Excess
Cash Flow" means, for any period, an amount (if
positive) equal to: (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated Adjusted EBITDA, plus (b) the Consolidated
Working
Capital Adjustment,
minus (ii) the sum, without duplication, of the amounts for
such period of (a)
scheduled repayments
of Indebtedness for borrowed money
(excluding repayments
of Revolving
Loans except to the extent the
Revolving
Commitments are permanently reduced in connection with such repayments), (b)
Consolidated Capital
Expenditures
(net of any
proceeds of (y) any related
financings with respect to such expenditures and (z) any sales of
assets used to
finance such
expenditures),
(c) Consolidated Interest Expense, and (d)
provisions for current
taxes based on income
of Holdings and its
Subsidiaries
and payable in cash with respect to such period.
"Consolidated Interest
Expense" means, for any period, total interest
expense (including
that portion
attributable
to Capital Leases in
accordance
with GAAP and
capitalized interest)
of Holdings and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Holdings and
its Subsidiaries,
including all commissions, discounts and other fees and
charges owed with respect to letters of credit and net costs under
Interest Rate
Agreements, but
excluding,
however, any amount not payable in Cash and any
amounts referred to in Section 2.10 payable on or before the
Closing Date.
"Consolidated Net
Income" means, for any
period, (i) the net
income
(or loss) of Holdings
and its Subsidiaries
on a consolidated basis for such
period taken as a single accounting period determined in conformity
with GAAP,
minus (ii) (a) the income (or loss) of any Person (other than a Subsidiary of
Holdings) in
which any other Person (other than Holdings or any of its
Subsidiaries) has a
joint interest,
except to the extent of the amount of
dividends or
other distributions actually paid to Holdings or any of its
Subsidiaries by such Person during such period, (b) the income (or loss) of
any
Person accrued
prior to the date it
becomes a Subsidiary
of Holdings or is
merged into or
consolidated with
Holdings or any of its
Subsidiaries or
that
Person's assets are
acquired by Holdings
or any of its
Subsidiaries, (c)
the
income (or
loss) of any Subsidiary of Holdings to the extent that the
declaration or payment of dividends or similar distributions by that
Subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree,
order, statute, rule or
governmental
regulation applicable to that Subsidiary, (d) any after-tax gains
or losses attributable
to Asset Sales or returned surplus assets of any Pension
Plan, and (e) (to the
extent not included in clauses (a) through (d) above) any
net extraordinary gains or net extraordinary losses.
"Consolidated Secured
Debt" means, as at any
date of
determination,
the aggregate stated
balance sheet amount of all Indebtedness (other than the
Senior Notes) of Holdings and its Subsidiaries which is secured by
a Lien on any
of their respective
assets, determined on a consolidated
basis in
accordance
with GAAP.
"Consolidated Working Capital" means, as at any date of
determination,
the excess of Consolidated Current Assets over Consolidated Current
Liabilities.
"Consolidated Working
Capital Adjustment"
means, for any period on a
consolidated basis,
the amount (which may be a negative number) by which
Consolidated Working
Capital as of the
beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such
period.
7
<PAGE>
"Contractual
Obligation" means,
as applied to any Person, any
provision of any Security issued by that Person or of any
indenture,
mortgage,
deed of trust,
contract, undertaking,
agreement or other
instrument to
which
that Person is a party
or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"Contributing Guarantors" as defined in Section 7.2.
"Control Account" means a Securities Account or Commodity Account
that
is the subject of an effective Securities Account Control
Agreement and that is
maintained by any
Credit Party with an Approved Securities Intermediary.
"Control Account" includes all Financial Assets held in a
Securities Account
or
a Commodity Account and all certificates and instruments,
if any, representing
or evidencing the Financial Assets contained therein.
"Conversion/Continuation Date" means the effective date of a
continuation or
conversion, as the
case may be, as set forth in the applicable
Conversion/Continuation Notice.
"Conversion/Continuation Notice" means a Conversion/Continuation
Notice substantially in the form of Exhibit A-2.
"Core Credit Parties"
means, collectively, (i) the Domestic Credit
Parties, (ii) each
Canadian Subsidiary which is a Foreign Guarantor Subsidiary
and (iii) each other
Foreign Guarantor Subsidiary that (in the case of this
clause (iii)) (x)
guarantees the
Obligations
in full on terms not
materially
less favorable to the Lenders than the guaranty provisions
contained in
Section
7 and (y) have granted to Collateral Agent a perfected Lien (having
the priority
required herein) on
substantially
all of its
assets to secure
the guaranty
described in clause (x) above.
"Counterpart Agreement" means a Counterpart Agreement substantially
in
the form of Exhibit H delivered by a Credit Party pursuant to
Section 5.10.
"Credit Document" means any of this Agreement, the Notes, if any, the
Collateral Documents,
the Intercreditor Agreement and all other documents,
instruments or
agreements
executed and delivered by a Credit Party for the
benefit of any Agent or any Lender in connection herewith.
"Credit Extension" means the making of a Term Loan.
"Credit Party" means, collectively, Borrower and the
Guarantors.
"Currency Agreement"
means any foreign
exchange contract,
currency
swap agreement,
futures contract, option contract, synthetic cap or other
similar agreement or
arrangement,
each of which is for
the purpose of hedging
the foreign currency
risk associated with Holdings' and its Subsidiaries'
operations and not for speculative purposes.
"Current Asset Collateral" as defined in the Intercreditor
Agreement.
[*]
"Default" means a
condition or event
that, after notice or
lapse of
time or both, would constitute an Event of Default.
-----------------
* Confidential
information has been omitted pursuant to a request to the
Securities
and Exchange Commission for confidential treatment. The
information has been separately filed with the Commission.
8
<PAGE>
"Deposit Account"
means a demand,
time, savings, passbook or like
account with a
bank, savings and loan association, credit union or like
organization, other
than an account
evidenced by a negotiable certificate of
deposit.
"Deposit Account
Bank" means a financial institution selected or
approved by
Administrative
Agent; it being understood and agreed that the
deposit account
banks of the Credit
Parties on the
Closing Date are Deposit
Account Banks.
"Deposit Account Control Agreement" has the meaning
specified in the
Pledge and Security Agreement.
"Dollars" and the sign
"$" mean the lawful money of the United States
of America.
"Domestic Credit Party" means each Credit Party other than the
Foreign
Guarantor Subsidiaries.
"Domestic Subsidiary" means any Subsidiary organized under the laws
of
the United States of America, any State thereof or the District of
Columbia.
"Draft Financial
Statements"
means the draft audited financial
statements of Holdings
and its Subsidiaries
dated as of March 15,
2007, for
Fiscal Year 2006,
consisting of balance
sheets and the
related consolidated
statements of income, stockholders' equity and cash flows for such
Fiscal Year.
"Eligible Assignee"
means (i) any Lender, any Affiliate of any Lender
and any Related Fund
(any two or more Related Funds being treated as a single
Eligible Assignee
for all purposes hereof), and (ii) any commercial bank,
insurance company,
investment
or mutual fund or other entity that is an
"accredited investor"
(as defined in Regulation D under the Securities Act) and
which extends credit or buys loans; provided, no Affiliate of Holdings
shall be
an Eligible Assignee.
"Employee Benefit Plan" means (i) in respect of any Credit Party
other
than any Canadian Subsidiary, any "employee benefit plan" as
defined in Section
3(3) of ERISA which is or was sponsored, maintained or contributed to by, or
required to be contributed by, Holdings, any of its Subsidiaries or
any of their
respective ERISA Affiliates and (ii) in respect of any Canadian
Subsidiary, any
employee benefit
plan of any nature or
kind that is not a Pension Plan and is
maintained by or contributed to, or required to be maintained
by or contributed
to, by any Canadian Subsidiary.
"Entitlement Holder" has the meaning given such term in the
UCC.
"Entitlement Order" has the meaning given such term in the UCC.
"Environmental Claim"
means any investigation, notice, notice of
violation, claim,
action, suit,
proceeding, demand,
abatement order or
other
order or directive (conditional or otherwise), by any Governmental Authority
or
any other Person,
arising (i) pursuant to or in connection with any actual or
alleged violation
of any Environmental Law; (ii) in connection with any
Hazardous Material or
any actual or alleged Hazardous Materials Activity; or
(iii) in connection with any actual or alleged damage, injury,
threat or harm to
health, safety, natural resources or the environment.
"Environmental Laws"
means any and all
current or future
foreign or
domestic, federal or
state (or any
subdivision of either
of them),
statutes,
ordinances,
orders,
orders-in-council, rules, regulations, judgments,
Governmental
Authorizations,
or any other requirements of Governmental
9
<PAGE>
Authorities relating to (i) environmental matters, including those relating to
any Hazardous
Materials
Activity;
(ii)
the generation, use, storage,
transportation or disposal of Hazardous Materials; or (iii) occupational safety
and health, industrial
hygiene, land use or the protection of
human, plant or
animal health or
welfare, in any manner
applicable
to Holdings or any of
its
Subsidiaries or any Facility.
"Equipment" means, as to each Credit Party, all of such Credit
Party's
now owned and hereafter acquired equipment, wherever located, including
machinery, data processing and computer equipment (whether owned or
licensed and
including embedded
software),
vehicles,
tools, furniture, fixtures, all
attachments, accessions and property now or hereafter affixed
thereto or used in
connection therewith,
and substitutions and replacements thereof, wherever
located.
"ERISA" means the Employee Retirement Income Security Act of
1974, as
amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any
corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the
Internal Revenue Code of which that Person
is a member;
(ii) any trade or business (whether or not incorporated)
which is a member of
a
group of trades or businesses under common control within the
meaning of Section
414(c) of the Internal Revenue Code of which that Person is a
member; and (iii)
any member of an affiliated service group within the meaning
of Section 414(m)
or (o) of the Internal
Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a
member. Any former ERISA Affiliate of Holdings or any of its
Subsidiaries shall
continue to be considered an ERISA Affiliate of Holdings or
any such Subsidiary
within the meaning of
this definition with
respect to the
period such entity was an ERISA Affiliate of Holdings or such Subsidiary and
with respect to liabilities arising after such period for which
Holdings or such
Subsidiary could be liable under the Internal Revenue Code or
ERISA.
"ERISA Event" means
(i) a "reportable
event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to
any
Pension Plan
(excluding those for
which the provision for 30-day notice to the
PBGC has been waived
by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with
respect to any
Pension Plan (whether
or not waived in
accordance with
Section 412(d) of
the
Internal Revenue
Code) or the failure to make by its due date a required
installment under
Section 412(m) of the
Internal Revenue Code
with respect to
any Pension
Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any
Pension Plan
pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress
termination described
in Section 4041(c) of ERISA; (iv) the
withdrawal by Holdings, any of its Subsidiaries or any of their
respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability to
Holdings, any of
its Subsidiaries or any of their respective Affiliates pursuant to Section
4063
or 4064 of ERISA; (v)
the institution
by the PBGC of
proceedings to terminate
any Pension
Plan, or the occurrence of any event or condition which might
constitute grounds
under ERISA for the
termination of, or the appointment of a
trustee to administer,
any Pension Plan;
(vi) the imposition of liability on
Holdings, any of its
Subsidiaries or any of
their respective ERISA
Affiliates
pursuant to Section
4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c)
of ERISA; (vii) the withdrawal of Holdings, any of its
Subsidiaries or any of
their respective
ERISA Affiliates in a complete or
partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer
Plan if there is any
potential liability
therefor, or the
receipt by Holdings,
any of its
Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in
reorganization or
insolvency pursuant
to Section 4241 or 4245 of ERISA,
or that it intends
to
terminate or has
terminated under
Section 4041A or 4042
of ERISA; (viii)
the
occurrence of an act
or omission
which could give rise
to the imposition
on
Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates of
fines,
10
<PAGE>
penalties, taxes or
related charges
under Chapter 43 of the Internal
Revenue
Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of
ERISA
in respect of any Employee Benefit Plan; (ix) the assertion
of a material claim
(other than routine claims for benefits) against any Employee
Benefit Plan other
than a Multiemployer Plan or the assets thereof, or against
Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates in
connection with any
Employee Benefit Plan;
(x) receipt from the Internal Revenue Service of notice
of the failure of any Pension Plan (or any other Employee
Benefit Plan
intended
to be qualified under
Section 401(a) of the
Internal Revenue Code)
to qualify
under Section 401(a)
of the Internal
Revenue Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption
from taxation under
Section 501(a) of the
Internal Revenue Code;
or (xi) the imposition
of a Lien
pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.
"Eurodollar Rate
Loan" means a Loan bearing interest at a rate
determined by reference to the Adjusted Eurodollar Rate.
"Event of Default" means each of the conditions or events set forth
in
Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended
from time to time, and any successor statute.
"Excluded Foreign
Entity" means each Foreign Subsidiary or Joint
Venture that has no revenues and tangible assets of less than $250,000 in the
aggregate.
"Facility" means any real property (including all buildings,
fixtures
or other improvements
located thereon) now, hereafter or heretofore owned,
leased, operated or
used by Holdings or any of its Subsidiaries or any of their
respective predecessors or Affiliates.
"Fair Share Contribution Amount" as defined in Section 7.2.
"Fair Share" as defined in Section 7.2.
"Fedders Canada" means
Fedders, Inc., a
corporation organized
under
the laws of the Province of Ontario, Canada.
"Fedders Xinle" means Fedders Xinle Co., Ltd., a People's
Republic of
China joint venture company.
"Federal Funds
Effective Rate" means
for any day, the rate per annum
(expressed, as a
decimal, rounded
upwards, if necessary, to the next higher
1/100 of 1%) equal to the weighted average of the rates on
overnight Federal
funds transactions
with members of the Federal Reserve System arranged by
Federal funds brokers
on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided,
(i) if such day
is not a Business Day, the Federal Funds Rate for such day shall be
such rate on
such transactions on the next preceding Business Day as so
published on the next
succeeding Business
Day, and (ii) if no
such rate is so published on such next
succeeding Business
Day, the Federal Funds Rate for such day shall be the
average rate charged to Administrative Agent, in its capacity as a
Lender, on
such day on such transactions as determined by Administrative
Agent.
"Financial Officer Certification" means, with respect to the
financial
statements for which such certification is required,
the certification of the
chief financial
officer of
Holdings that such financial statements fairly
present, in all
material respects, the
financial condition of Holdings and its
11
<PAGE>
Subsidiaries as at the dates indicated and the results of their
operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments.
"Financial Plan" as defined in Section 5.1(i).
"First Priority"
means, with respect to any Lien purported to be
created in any Fixed Asset Collateral pursuant to any Collateral
Document, that
such Lien is the only Lien to which such Collateral is subject,
other than any
Permitted Liens which are junior in priority to Collateral
Agent's Lien on
such
Collateral, mortgages existing on the Closing Date and set forth on
Schedule 6.2
and inchoate Liens arising by operation of law for which amounts
are not yet due
and payable.
"Fiscal Month" means a fiscal month of any Fiscal Year.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means
the fiscal year of Holdings and its Subsidiaries
ending on December 31 of each calendar year.
"Fixed Asset Collateral" as defined in the Intercreditor
Agreement.
"Flood Hazard
Property" means any Real Estate Asset subject to a
mortgage in favor of Collateral Agent, for the benefit of the Secured
Parties,
and located in an area designated by the Federal Emergency
Management Agency
as
having special flood or mud slide hazards.
"Foreign Guarantor
Subsidiary" means (a) each Canadian Subsidiary and
(b) each Foreign
Subsidiary
at any time
having tangible assets of at least
$500,000; provided,
that no such Foreign Subsidiary shall be a "Foreign
Guarantor Subsidiary"
under this clause (b) if its guarantee of the Obligations
would (i) result in a Credit Party incurring material adverse tax
consequences,
(ii) violate (x)
applicable
law (except to the
extent such guarantee
may be
limited without
violation of applicable law) or (y) any Contractual Obligation
of such Foreign
Subsidiary
in effect on the
Closing Date or entered into with
the consent of
Administrative Agent
following the Closing Date in connection
with the incurrence
of Indebtedness of such Foreign Subsidiary pursuant to
Section 6.1, or (iii)
reasonably be expected
to prevent
Indebtedness of
such
Foreign Subsidiaries from being renewed; provided, that Fedders Xinle (so long
as it is a Joint Venture) shall not be a Foreign Guarantor
Subsidiary.
"Foreign Subsidiary"
means any Subsidiary that is not a Domestic
Subsidiary or a Canadian Subsidiary.
"Funding Guarantors" as defined in Section 7.2.
"Funding Notice" means
a notice substantially
in the form of Exhibit
A-1.
"GAAP" means, subject
to the limitations on the application thereof
set forth in Section 1.2, United States generally accepted
accounting principles
in effect as of the date of determination thereof.
"General Intangible" as defined in the UCC.
"Governmental
Authority" means
any federal, state, provincial,
municipal, national or
other government,
governmental department, commission,
board, bureau,
court, agency, central bank, tribunal or instrumentality or
political subdivision
thereof or any entity
or officer exercising
executive,
12
<PAGE>
legislative, judicial,
regulatory or
administrative functions of or pertaining
to any government or any court, in each case whether associated with a state of
the United States, the United States, or a foreign entity or
government.
"Governmental Authorization" means any permit, license,
authorization,
plan, directive,
consent order or
consent decree of or
from any
Governmental
Authority.
"Grantor" as defined in the Pledge and Security Agreement.
"GSCP" as defined in the preamble hereto.
"Guaranteed Obligations" as defined in Section 7.1.
"Guarantor" means Holdings and each Subsidiary of Holdings (other
than
Borrower).
"Guarantor Subsidiary" means each Guarantor other than
Holdings.
"Guaranty" means the
guaranty of each
Guarantor set forth in Section
7.
"Hazardous Materials"
means any chemical, material or substance,
exposure to which is
prohibited,
limited or regulated by any Governmental
Authority or which may
or could pose a hazard
to the health and
safety of the
owners, occupants
or any Persons in the vicinity of any Facility or to the
indoor or outdoor environment.
"Hazardous Materials
Activity" means any past, current, proposed or
threatened activity,
event or occurrence
involving any Hazardous Materials,
including the
use, manufacture, possession, storage, holding, presence,
existence,
location, Release,
threatened
Release, discharge, placement,
generation,
transportation,
processing,
construction,
treatment,
abatement,
removal, remediation,
disposal, disposition or handling of any Hazardous
Materials, and any
corrective action or
response action with respect to any of
the foregoing.
"Hedge Agreement"
means an Interest Rate Agreement or a Currency
Agreement entered
into with a Lender Counterparty in order to satisfy the
requirements of this
Agreement or otherwise in the ordinary course of Holdings'
or any of its Subsidiaries' businesses.
"Highest Lawful Rate"
means the maximum lawful interest rate, if any,
that at any time
or from time to time may be contracted for, charged, or
received under the
laws applicable to any
Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which
may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"Historical Financial
Statements"
means as of the
Closing Date, (i)
the audited financial
statements of Holdings and its Subsidiaries, for Fiscal
Years 2003,
2004, and 2005, consisting of balance sheets and the related
consolidated statements of income, stockholders' equity and cash
flows for such
Fiscal Years, and (ii)
the unaudited
financial statements
of Holdings and its
Subsidiaries as at the most recently ended Fiscal Month for which
such financial
statements are
available,
consisting
of a balance sheet and the related
consolidated
statements of income,
stockholders' equity and cash flows for the
period since the beginning of Fiscal Year 2006 ending on such
date.
"Holdings" as defined in the preamble hereto.
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<PAGE>
"Holdings Guarantees" as defined in Section 6.1(j).
"Increased-Cost Lenders" as defined in Section 2.22.
"Indebtedness", as
applied to any Person, means, without duplication,
(i) all indebtedness
for borrowed money;
(ii) that portion of obligations with
respect to Capital
Leases that is
properly classified as a liability on a
balance sheet in conformity with GAAP; (iii) notes payable and drafts
accepted
representing
extensions of credit whether or not representing obligations for
borrowed money;
(iv) any obligation owed for all or any part of the
deferred
purchase price of property or services (excluding any such
obligations
incurred
under ERISA), which purchase price is (a) due more than six months
from the date
of incurrence of the obligation in respect thereof or (b) evidenced
by a note or
similar written
instrument;
(v) all indebtedness secured by any Lien on any
property or asset
owned or held by that Person regardless of whether the
indebtedness secured
thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person; (vi) the face amount of any letter
of
credit issued
for the account of that Person or as to which that Person is
otherwise liable for
reimbursement
of drawings;
(vii) the direct or
indirect
guaranty, endorsement
(otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale
with recourse
by such Person of the indebtedness obligation of another; (viii) any
obligation
of such Person the primary purpose or intent of which is to provide
assurance to
an obligee that the indebtedness obligation of the obligor thereof
will be paid,
or any agreement relating to such indebtedness obligation will be
complied with,
or the holders thereof
will be protected (in
whole or in part) against loss in
respect thereof;
(ix) any liability of such Person for the indebtedness
obligation of another
through any agreement
(contingent or
otherwise) (a) to
purchase, repurchase
or otherwise acquire such obligation or any security
therefor, or to
provide funds for the
payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases,
capital
contributions
or otherwise) or (b)
to maintain the solvency or any balance sheet item, level
of income or financial
condition of another if, in the case of any
agreement
described under
subclauses (a) or (b)
of this clause (ix), the primary purpose
or intent thereof is as described in clause (viii) above; and (x) all
obligations of such Person in respect of any exchange traded or
over the counter
derivative
transaction,
including, without
limitation,
any Interest Rate
Agreement and
Currency Agreement, whether entered into for hedging or
speculative purposes; provided, in no event shall obligations under
any Interest
Rate Agreement
and any Currency Agreement be deemed "Indebtedness" for any
purpose under Section 6.8.
"Indemnified
Liabilities"
means,
collectively,
any and
all
liabilities,
obligations, losses, damages (including natural resource
damages),
penalties, claims
(including Environmental Claims), actions, judgments, suits,
costs (including
the costs of any
investigation,
study, sampling, testing,
abatement, cleanup,
removal, remediation
or other response action necessary to
remove, remediate, clean up or abate any Hazardous Materials
Activity), expenses
and disbursements
of any kind or nature
whatsoever
(including the
reasonable
fees and disbursements
of counsel for Indemnitees in connection with any
investigative,
administrative or judicial proceeding commenced or threatened
by
any Person, whether or not any such Indemnitee shall be designated
as a party or
a potential party thereto, and any fees or expenses
incurred by
Indemnitees in
enforcing this indemnity), whether direct, indirect or
consequential and whether
based on any federal,
state or foreign laws,
statutes, rules or regulations
(including securities
and commercial laws,
statutes, rules or
regulations and
Environmental Laws),
on common law or equitable cause or on contract or
otherwise, that may be
imposed on, incurred
by, or asserted
against any such
Indemnitee, in any
manner relating to or
arising out of (i) this Agreement or
the other Credit
Documents or the transactions contemplated hereby or thereby
(including Lenders'
agreement to make
Credit Extensions or the use or intended
use of the proceeds
thereof, or any
enforcement of any of the Credit Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Guaranty)); (ii) the statements contained
in the commitment letter delivered by any Lender to Borrower with
respect to the
transactions contemplated by
14
<PAGE>
this Agreement;
or (iii) any
Environmental
Claim or any Hazardous
Materials
Activity relating
to or arising
from, directly or indirectly, any past or
present activity,
operation, land
ownership, or practice of Holdings or any of
its Subsidiaries.
"Indemnitee" as defined in Section 10.3.
"Installment" as defined in Section 2.11.
"Interest Coverage Ratio" means the ratio of (i) Consolidated
Adjusted
EBITDA for the
twelve-Fiscal
Month period then ended to (ii) Consolidated
Interest Expense for such twelve-Fiscal Month period.
"Intellectual
Property" as
defined in the Pledge and Security
Agreement.
"Intellectual Property
Security Agreement" as defined in the
Pledge
and Security Agreement.
"Intercreditor
Agreement" means that certain Intercreditor Agreement,
dated as of the date hereof, among Borrower, Holdings, Administrative Agent,
Collateral Agent,
the Revolving Credit Facility Agent in the form attached
hereto as Exhibit L.
"Interest Payment
Date" means with respect to (i) any Base Rate Loan,
the first Business Day
of each month
commencing on April 1,
2007 and the Term
Loan Maturity
Date and (ii) any
Eurodollar
Rate Loan, the last day of each
Interest Period
applicable
to such Loan and the Term Loan Maturity Date;
provided, in the case
of each Interest
Period of longer
than three months,
"Interest Payment Date" shall also include each date that is three
months, or an
integral multiple thereof, after the commencement of such
Interest Period;
and
upon prepayment, in each case payable in arrears.
"Interest Period" means, in connection with a Eurodollar Rate Loan,
an
interest period of one-, two-, three- or six-months, as selected by Borrower in
the applicable Funding Notice or Conversion/Continuation
Notice, (i)
initially,
commencing on the Closing Date or Conversion/Continuation
Date thereof, as
the
case may be; and (ii) thereafter, commencing on the day on which
the immediately
preceding Interest
Period expires;
provided, (a) if an Interest Period
would
otherwise expire on a day that is not a Business Day, such Interest
Period shall
expire on the next succeeding Business Day unless no further
Business Day occurs
in such month, in which case such Interest Period shall expire on the
immediately preceding
Business Day; (b) any
Interest Period that begins on the
last Business
Day of a calendar month (or on a day for which there is no
numerically
corresponding day in the calendar month at the end of such
Interest
Period) shall,
subject to clause (c) of this definition, end on the last
Business Day of a calendar month; and (c) no Interest Period with
respect to any
portion of Term Loans shall extend beyond the Term Loan Maturity
Date.
"Interest Rate
Agreement"
means any interest
rate swap agreement,
interest rate cap
agreement,
interest rate collar agreement, interest rate
hedging agreement or
other similar
agreement or arrangement, each of which is
for the purpose of hedging the interest rate exposure associated with Holdings'
and its Subsidiaries' operations and not for speculative
purposes.
"Interest Rate Determination Date" means, with respect to any
Interest
Period, the date
that is two
Business Days prior to the first day of such
Interest Period.
"Internal Revenue
Code" means the
Internal Revenue Code
of 1986, as
amended.
15
<PAGE>
"Investment" means
(i) any direct or indirect purchase or other
acquisition by
Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any of the Securities of any other Person (other than a
Guarantor
Subsidiary); (ii) any
direct or indirect
redemption,
retirement, purchase
or
other acquisition
for value,
by any Subsidiary of Holdings from any Person
(other than Holdings or any Guarantor Subsidiary), of any Capital Stock of such
Person; and (iii) any
direct or indirect loan, advance (other than advances
to
employees for moving,
entertainment and
travel expenses,
drawing accounts and
similar
expenditures in
the ordinary course of business) or capital
contributions by
Holdings or any of its Subsidiaries to any other Person (other
than Holdings or any
Guarantor Subsidiary),
including all indebtedness and
accounts receivable
from that other Person
that are not current
assets or did
not arise from sales to that other Person in the ordinary course of business.
The amount of any Investment shall be the original cost of such
Investment plus
the cost of all
additions thereto,
without any
adjustments
for increases or
decreases in value, or write-ups, write-downs or write-offs with
respect to such
Investment, and the
outstanding amount thereof, in each case, at any time shall
be calculated net of
any principal
repayment or return of capital with respect
thereto following the Closing Date (such repayment or return not to
be in excess
of the original amount invested).
"Islandaire" means Islandaire, Inc., a New York corporation.
"Joint Venture" means
a joint venture,
partnership or other
similar
arrangement, whether in corporate, partnership or other legal form;
provided, in
no event shall any
corporate Subsidiary
of any Person be
considered
to be a
Joint Venture to which such Person is a party.
"Judgment Conversion Date" as defined in Section 10.24(a).
"Judgment Currency" as defined in Section 10.24(a).
"Landlord Consent and
Estoppel" means, with
respect to any Leasehold
Property a letter,
certificate or other
instrument in writing
from the lessor
under the related
lease, pursuant to
which, among other
things, the
landlord
consents to the granting of a Mortgage on such Leasehold
Property by the
Credit
Party tenant,
such Landlord Consent and Estoppel to be in form
and substance
acceptable to Collateral Agent in its reasonable
discretion,
but in any event
sufficient for
Collateral
Agent to obtain a
Title Policy with respect to such
Mortgage.
"Landlord Personal
Property Collateral Access Agreement" means a
Landlord Waiver and
Consent Agreement
substantially
in the form of Exhibit
K
with such amendments or modifications as may be approved by
Collateral Agent.
"Leasehold Property"
means any leasehold interest of any Credit Party
as lessee under
any lease of real property, other than any such leasehold
interest designated from time to time by Collateral Agent in its
sole discretion
as not being required to be included in the Collateral.
"Lender" means each
financial institution listed on the signature
pages hereto as a
Lender, and any other
Person that becomes a party hereto
pursuant to an Assignment Agreement.
"Lender Counterparty"
means each Lender or
any Affiliate of a Lender
counterparty to a Hedge Agreement (including any Person who is a
Lender (and any
Affiliate thereof) as
of the Closing Date but subsequently, whether before or
after entering into a Hedge Agreement, ceases to be a Lender)
including, without
limitation, each such
Affiliate that enters into a joinder agreement with
Collateral Agent.
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<PAGE>
"Lien" means (i) any
lien, mortgage,
pledge, assignment, security
interest, hypothec,
deemed trust, charge
or encumbrance of any kind (including
any agreement to give any of the foregoing, any conditional sale or other
title
retention agreement,
and any lease in the nature thereof) and any option, trust
or other preferential
arrangement
having the
practical effect of any of the
foregoing and (ii) in
the case of
Securities, any
purchase option, call or
similar right of a third party with respect to such Securities.
"Margin Stock" as defined in Regulation U of the Board of Governors
as
in effect from time to time.
"Material Adverse
Effect" means a
material adverse
effect on and/or
material adverse
developments
with respect to (i)
the business,
operations,
properties, assets,
condition (financial or otherwise) or prospects of Holdings
and its Subsidiaries
taken as a whole; (ii)
the ability of any Credit Party to
fully and timely perform its Obligations; (iii) the legality, validity,
binding
effect or enforceability against a Credit Party of a Credit
Document to which it
is a party; or (iv) the material rights, remedies and benefits available
to, or
conferred upon,
any Agent and any
Lender or any Secured Party under any Credit
Document.
"Material Contract"
means (a) any contract or other agreement (other
than the Credit
Documents),
written or oral,
of Borrower or any Guarantor
involving monetary
liability of or to any Person in an amount in excess of
$500,000 in any Fiscal Year and (b) any other contract or other arrangement to
which Holdings
or any of its
Subsidiaries
is a party
(other than the
Credit
Documents) for which breach, nonperformance, cancellation or failure to renew
could reasonably be expected to have a Material Adverse Effect.
"Moody's" means Moody's Investor Services, Inc.
"Mortgage" means a Mortgage substantially in the form of Exhibit J,
as
it may be amended, supplemented or otherwise modified from time to
time.
"Multiemployer Plan"
means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means The National Association of Insurance Commissioners,
and
any successor thereto.
"Narrative Report" means, with respect to the financial statements
for
which such narrative
report is required,
a narrative
report describing the
operations of
Holdings and its Subsidiaries in the form prepared for
presentation to senior management thereof for the applicable month,
Fiscal Month
or Fiscal Year and for the period from the beginning of the then
current Fiscal
Year to the end of such period to which such financial statements
relate.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale
(other
than (except when there are no commitments or Indebtedness
outstanding under the
Revolving Credit
Agreement)
any Asset Sale with respect to Current Asset
Collateral), an amount
equal to: (i) Cash payments (including any Cash received
by way of deferred payment pursuant to, or by monetization of, a
note receivable
or otherwise, but only
as and when so received) received by Holdings or any of
its Subsidiaries
from such Asset Sale,
minus (ii) any bona
fide direct costs
incurred in connection with such Asset Sale, including (a) income
or gains taxes
payable by the seller as a result of any gain recognized in
connection with such
Asset Sale,
(b) payment of the
outstanding
principal amount of, premium or
penalty, if any, and
interest on any
Indebtedness (other
than the Term Loans)
that is secured
by a Lien on the
stock or assets in
17
<PAGE>
question and that is required to be repaid under the terms thereof as a result
of such Asset Sale and (c) a reasonable reserve for any
indemnification payments
(fixed or contingent)
attributable to seller's indemnities and
representations
and warranties to purchaser in respect of such Asset Sale
undertaken by Holdings
or any of its Subsidiaries in connection with such Asset Sale.
"Net
Insurance/Condemnation
Proceeds" means an
amount equal to: (i)
any Cash payments or
proceeds received by
Holdings or any of its
Subsidiaries
(a) under any casualty
insurance policy in respect of a covered loss thereunder
or (b) as a result
of the taking of any assets of Holdings or any of its
Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation
or otherwise, or
pursuant to a sale of any such assets to a purchaser with such
power under threat of
such a taking, minus
(ii) (a) any actual and reasonable
costs incurred by
Holdings or any of its
Subsidiaries in
connection with
the
adjustment or settlement of any claims of Holdings or such
Subsidiary in respect
thereof, and (b) any bona fide direct costs incurred in connection
with any sale
of such assets as
referred to in clause
(i)(b) of this
definition,
including
income taxes payable as a result of any gain recognized in
connection therewith,
in each case other than (except when there are no commitments or Indebtedness
outstanding under the
Revolving Credit
Agreement) with respect to assets which
are Current Asset Collateral.
"Nonpublic
Information"
means
information which
has not been
disseminated in a manner making it available to investors
generally, within
the
meaning of Regulation FD.
"Non-US Lender" as defined in Section 2.20(c).
"Note" means a promissory note in the form of Exhibit B, as
it may be
amended, supplemented or otherwise modified from time to time.
"Notice" means a Funding Notice, or a Conversion/ Continuation
Notice.
"Obligation Currency" as defined in Section 10.24(a).
"Obligations" means
all obligations
of every nature of each Credit
Party, including
obligations from time to time owed to Agents (including former
Agents), Lenders
or any of them and
Lender Counterparties, under any Credit
Document or Hedge Agreement, whether for principal, interest
(including interest
which, but for the
filing of a petition
in bankruptcy with respect to such
Credit Party, would
have accrued on any
Obligation, whether or
not a claim is
allowed against such
Credit Party for such
interest in the related bankruptcy
proceeding), payments for early termination of Hedge Agreements,
fees, expenses,
indemnification or otherwise.
"Obligee Guarantor" as defined in Section 7.7.
"Organizational
Documents" means (i) with respect to any corporation,
its certificate or articles of incorporation or organization, as amended, and
its by-laws,
as amended,
(ii) with respect to any limited
partnership,
its
certificate or
declaration
of limited partnership, as amended, and its
partnership
agreement, as
amended, (iii) with respect to any general
partnership, its partnership agreement, as amended, and (iv) with
respect to any
limited liability
company, its articles
of organization, as
amended, and its
operating agreement,
as amended.
In the event any term
or condition
of this
Agreement or any other Credit Document requires any Organizational Document to
be certified
by a secretary
of state or similar
governmental
official, the
reference to any such "Organizational Document" shall only be to a
document of a
type customarily certified by such governmental official.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor
thereto.
18
<PAGE>
"Pension Plan" means (i) in respect of any Credit Party other than
any
Canadian Subsidiary, any Employee Benefit Plan, other than a
Multiemployer Plan,
which is subject to Section 412 of the Internal Revenue Code or Section 302 of
ERISA and (ii) in respect of any Canadian Subsidiary, each pension,
supplementary pension,
retirement
savings or other
retirement income plan
or
arrangement of any kind, registered or non-registered, established, maintained
or contributed
to by any Canadian Subsidiary for its employees or former
employees, but does
not include the Canada
Pension Plan or the Quebec Pension
Plan that is maintained by the Government of Canada or the
Province of Quebec,
respectively.
"Permitted
Acquisition" means any
acquisition by
Borrower or any of
its wholly-owned Subsidiaries, whether by purchase, merger or
otherwise, of all
or substantially
all of the
assets of, all of the Capital Stock of, or a
business line or unit or a division of, any Person, in each case made only with
the prior written consent of the Requisite Lenders and
Administrative Agent.
"Permitted Liens"
means each of the Liens permitted pursuant to
Section 6.2.
"Person" means and
includes natural
persons, corporations, limited
partnerships, general
partnerships,
limited liability companies, unlimited
liability companies,
limited liability partnerships, joint stock companies,
Joint Ventures,
associations,
companies, trusts,
banks, trust companies, land
trusts, business
trusts or other organizations, whether or not legal entities,
and Governmental Authorities.
"Platform" as defined in Section 5.1(p).
"Pledge and
Security Agreement" means the Pledge and Security
Agreement to be executed by Borrower and each Guarantor substantially in the
form of Exhibit I, as it may be amended, supplemented or otherwise
modified from
time to time.
"Prime Rate"
means the rate of
interest quoted in The Wall Street
Journal, Money Rates
Section as the Prime Rate (currently defined as the base
rate on corporate
loans posted by at least 75% of the
nation's thirty (30)
largest banks),
as in effect from time
to time. The Prime
Rate is a reference
rate and does not necessarily represent the lowest or best rate
actually charged
to any customer. Agent
or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
"Principal Office"
means, for each of Administrative Agent, such
Person's "Principal
Office" as set forth on Appendix B, or such other office or
office of a third party or sub-agent, as appropriate, as such Person may from
time to time designate in writing to Borrower and each Lender.
"Projections" as defined in Section 4.8.
"Pro Rata Share" means with respect to all payments, computations and
other matters relating to the Term Loan of any Lender, the percentage obtained
by dividing (a) the Term Loan Exposure of that Lender by (b) the
aggregate Term
Loan Exposure of all Lenders.
"Real Estate Asset" means, at any time of determination,
any interest
(fee, leasehold
or otherwise) then owned by any Credit Party in any real
property.
"Record Document" means, with respect to any Leasehold Property, (i)
the lease evidencing such Leasehold Property or a memorandum
thereof, executed
and acknowledged by the owner of the affected real property,
as lessor, or (ii)
if such Leasehold
Property was acquired or subleased from the holder of a
Recorded Leasehold
Interest, the applicable assignment or sublease
document,
executed
19
<PAGE>
and acknowledged
by such holder,
in each case in form
sufficient to give such
constructive
notice upon
recordation
and otherwise in form reasonably
satisfactory to Collateral Agent.
"Recorded Leasehold
Interest" means a Leasehold Property with respect
to which a Record
Document has been recorded in all places necessary or
desirable, in
Collateral Agent's
reasonable
judgment, to give constructive
notice of such Leasehold Property to third-party purchasers and
encumbrancers of
the affected real property.
"Refinanced
Indebtedness" means,
collectively, the
Indebtedness and
other obligations
outstanding under (a)
that certain Amended and Restated Loan
and Security Agreement, dated as of January 31, 2006, among
Borrower, certain of
its subsidiaries
as borrowers
and guarantors, the lenders and issuing banks
party thereto
and Wachovia Bank, N.A. (formerly Wachovia Bank, National
Association) as administrative agent, as amended prior to the
Closing Date (the
"Existing Loan Agreement") and (b) each other loan agreement,
credit agreement,
note, guaranty,
mortgage or other agreement, document or instrument in
connection with the Existing Loan Agreement.
"Refinancing" as defined in the recitals hereto.
"Register" as defined in Section 2.6(b).
"Regulation D" means
Regulation D of the
Board of Governors,
as in
effect from time to time.
"Regulation FD"
means Regulation FD as promulgated by the US
Securities and Exchange Commission under the Securities
Act and Exchange Act as
in effect from time to time.
"Related Fund" means, with respect to any Lender that is an
investment
fund, any other
investment
fund that invests in
commercial loans and
that is
managed or
advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Release" means
any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge,
dispersal,
dumping,
leaching or
migration of any Hazardous Material into the indoor or outdoor
environment (including the abandonment or disposal of any barrels,
containers or
other closed
receptacles containing
any Hazardous Material), including the
movement of any
Hazardous Material
through the air,
soil, surface water or
groundwater.
"Replacement Lender" as defined in Section 2.22.
"Reporting Month"
means each Fiscal Month other than any Fiscal Month
ending the same date as any Fiscal Quarter.
"Requisite Lenders"
means one or more
Lenders having or holding Term
Loan Exposure and
representing at least 662/3% of the sum of the aggregate Term
Loan Exposure of all Lenders.
"Restricted
Junior Payment"
means
(i) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of stock
of Holdings or Borrower now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that
class; (ii) any
redemption,
retirement, sinking
fund or similar
payment, purchase or other
acquisition for value,
direct or indirect, of
any shares of any class of stock
of Holdings or Borrower now or hereafter outstanding; (iii) any cash payment
made to retire, or to obtain the surrender of, any outstanding
warrants,
20
<PAGE>
options or other
rights to acquire
shares of any class of stock of Holdings or
Borrower now or hereafter outstanding, (iv) any loan or advance by
Borrower or
its Subsidiaries to Holdings and (v) any payment or prepayment of
principal, of
premium, if any, or interest on or redemption, purchase,
retirement,
defeasance
(including in substance or legal defeasance), sinking fund or similar
payment
with respect to the Senior Notes;
"Revolving
Commitments" means
the revolving commitments made to
Borrower and the other
borrowers under and pursuant to the
Revolving Credit
Agreement.
"Revolving Credit
Agreement"
means that certain
Revolving Loan and
Security Agreement,
dated as of the date
hereof, among Borrower
and the other
borrowers party thereto, the Guarantors, the Revolving Credit Facility Agent,
GSCP, as sole lead arranger, sole bookrunner and sole syndication
agent, and the
other financial
institutions
party thereto, together with any agreements
or
instruments entered
into from time to time in connection with any refinancing,
restatement,
replacement or refunding, in whole or in part, of the
obligations
incurred thereunder.
"Revolving Credit Documents" has the meaning given to the term
"Credit
Documents" in the Revolving Credit Agreement.
"Revolving Credit
Facility" as defined in the Revolving Credit
Agreement.
"Revolving Credit
Facility Agent" means Bank of America,
N.A., a
national banking
association,
in its capacity as administrative agent and
collateral agent
under the Revolving Credit Agreement, together with its
permitted successors in such capacity.
"Revolving Credit
Facility Secured
Parties" has the meaning given to
the term "Secured Parties" in the Revolving Credit Agreement.
"Revolving Loans"
means the loans made to Borrower and the other
borrowers under and pursuant to the Revolving Credit Agreement.
"S&P" means
Standard & Poor's Ratings Group, a division of The McGraw
Hill Corporation.
"Second Priority"
means, with respect to any Lien created in any
Current Asset Collateral pursuant to any Collateral Document,
that such Lien is
subordinated solely to
the Liens on such
Collateral created by
the Revolving
Loan Credit Documents
and inchoate Liens
arising by operation of law for which
amounts are not yet due and payable.
"Secured Leverage
Ratio" means the ratio of (i) Consolidated Secured
Debt as of such day to (ii) Consolidated Adjusted EBITDA for the
twelve-Fiscal
Month period ending on such date.
"Secured Parties" has
the meaning assigned to that term in the Pledge
and Security Agreement.
"Securities" means any stock, shares, partnership interests, trust
units, voting trust
certificates,
certificates of interest or participation in
any profit-sharing
agreement or arrangement, options, warrants, bonds,
debentures, notes,
or other evidences of
indebtedness,
secured or
unsecured,
convertible,
subordinated or otherwise, or in general any instruments
commonly
known as "securities" or any certificates of interest, shares or participations
in temporary or interim certificates for the purchase or
acquisition of, or any
right to subscribe to, purchase or acquire, any of the
foregoing.
21
<PAGE>
"Securities Account" has the meaning given to such term in the
UCC.
"Securities Account
Control Agreement" has
the meaning specified
in
the Pledge and Security Agreement.
"Securities Act" means
the Securities
Act of 1933,
as amended from
time to time, and any successor statute.
"Senior Notes" means the 97/8% Senior Notes due March 1, 2014,
issued
by Borrower pursuant
to the Senior Notes
Indenture in the aggregate principal
amount of $155,000,000, as the same now exists or may hereafter be
(as permitted
hereunder) amended,
modified, supplemented, extended, renewed, restated or
replaced.
"Senior Notes Documents" means, collectively, the Senior Notes, the
Senior Notes Guaranty,
the Senior Notes
Indenture and each
other agreement or
document in connection therewith.
"Senior Notes
Guaranty" means the
"Guaranty" of the
Senior Notes by
each of the Senior Notes Guarantors under the Senior Notes
Indenture.
"Senior Notes Indenture" means, the Indenture, dated as of March 8,
2004, among
Borrower, Holdings and certain Subsidiaries of Holdings as
"Guarantors"
thereunder and
the Senior Notes Trustee, as amended and
supplemented by the
First Supplemental Indenture and Waiver, dated as of
September 13, 2005,
among Borrower, Holdings and such "Guarantors" and the
Senior Notes Trustee,
in effect on the date
hereof or as may
hereafter be (as
permitted hereby) amended, modified, supplemented, extended, renewed, restated
or replaced.
"Senior Notes Interest
Payment" means that certain interest payment
with respect to the
Senior Notes due on
March 1, 2007, overdue
as of the date
hereof.
"Senior Notes Trustee"
means U.S.
Bank, National Association, as
trustee under the Senior Notes Indenture, and its successors and assigns,
and
any replacement
trustee permitted
pursuant to the terms
and conditions of the
Senior Notes Indenture.
"Settlement Confirmation" as defined in Section 10.6(b).
"Settlement Service" as defined in Section 10.6(d).
"Solvency Certificate"
means a Solvency Certificate of the chief
financial officer of Holdings substantially in the form of Exhibit
G-2.
"Solvent" means,
with respect to (x) Borrower (on a consolidated
basis) and (y) the
Credit Parties (taken as a whole) that as of the date of
determination, both
(i) (a) the respective
sums of such
Credit Party's and
Credit Parties'
debt (including contingent liabilities) do not exceed the
present fair saleable value of such Credit Party's and Credit
Parties' present
assets; (b) such
Credit Party's and Credit Parties' capital is not unreasonably
small in relation to their respective businesses as contemplated on the
Closing
Date and reflected in the Projections or with respect to any transaction
contemplated or
undertaken
after the Closing Date; and (c) such Person and
Persons have not
incurred and do not intend to incur,
or believe (nor
should
they reasonably
believe) that they will incur, debts beyond their abilities
to
pay such debts as they become due (whether at maturity or otherwise),
respectively; and (ii)
such Person and Persons are "solvent" within the meaning
given that term and similar terms under the Bankruptcy Code and applicable laws
relating to
fraudulent
transfers and conveyances in the jurisdiction of
22
<PAGE>
organization of such
Person and Persons and the state in which each such
Person's chief executive office is located, respectively. For purposes of this
definition, the amount of any contingent liability at any time
shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents
the amount that can
reasonably be expected
to become an
actual or matured liability (irrespective of whether such
contingent liabilities
meet the criteria for accrual under Statement of Financial
Accounting
Standard
No. 5).
"Subject Transaction" as defined in Section 6.8(e).
"Subsidiary" means,
with respect to any Person, any corporation,
partnership, limited
liability company, association, joint venture or other
business entity of
which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the
occurrence of
any contingency)
to vote in the
election of the Person or Persons (whether
directors, managers,
trustees or other
Persons performing
similar functions)
having the power to direct or cause the direction of the management
and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a
combination
thereof; provided,
in determining the
percentage of ownership interests of any
Person controlled by
another Person, no
ownership interest in
the nature of a
"qualifying share" of the former Person shall be deemed to be
outstanding.
"Syndication Agent" as defined in the preamble hereto.
"Tax" means any present or future tax, levy, impost, duty,
assessment,
charge, fee, deduction or withholding of any nature and whatever
called, imposed
by a Governmental
Authority;
provided, "Tax on the overall net income" of a
Person shall be construed as a reference to a tax imposed by the
jurisdiction in
which that Person is organized or in which that Person's applicable principal
office (and/or,
in the case of a
Lender, its lending
office) is located or in
which that Person
(and/or, in the case of a Lender,
its lending office) is
deemed to be doing
business on all or part of the net income, profits or gains
(whether worldwide,
or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction,
or otherwise)
of that Person (and/or, in the case of a Lender, its applicable
lending office).
"Term Loan" means a Term Loan made by a Lender to Borrower pursuant
to
Section 2.1.
"Term Loan Commitment"
means the commitment of a Lender to make or
otherwise fund a Term Loan and "Term Loan Commitments" means such
commitments of
all Lenders in the aggregate. The amount of each Lender's Term
Loan Commitment
is set forth on Appendix A or in the applicable Assignment
Agreement, subject to
any adjustment or
reduction pursuant to
the terms and conditions hereof. The
aggregate amount
of the Term Loan Commitments as of the Closing Date is
$50,000,000.
"Term Loan Exposure" means, with respect to any Lender, as of any
date
of determination,
the outstanding
principal amount of the Term Loans of
such
Lender; provided,
at any time prior to
the making of the Term Loans, the Term
Loan Exposure
of any Lender shall be equal to such Lender's Term Loan
Commitment.
"Term Loan Maturity Date" means the earlier of (i) September 20,
2009,
and (ii) the date that all Term Loans shall become due and payable in full
hereunder, whether by acceleration or otherwise.
"Terminated Lender" as defined in Section 2.22.
23
<PAGE>
"Title Policy" as defined in Section 3.1(h).
"Transaction Costs"
means the fees,
costs and expenses payable by
Holdings, Borrower or
any of Holdings' Subsidiaries pursuant to Section 10.2 on
or before the Closing Date in connection with the transactions contemplated by
the Credit Documents.
"Type" means,
with respect to Term Loans, a Base Rate Loan or a
Eurodollar Rate Loan.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent
legislation) as in
effect in any applicable jurisdiction; provided that where
the perfection, effect
of perfection or
non-perfection or priority of any Lien
granted under any Collateral Document is governed by the laws as
the Province of
Ontario, UCC shall
include the Personal
Property Security Act (Ontario) as the
context requires.
"Vienna Property"
means that certain real property located at Vienna
Industrial Park, Vienna, Georgia, owned by Eubank Coil Company.
"Walkersville
Property" means that
certain real property
located at
8301 B. Retreat Road, Walkersville, Maryland, owned by Rotorex
Company, Inc..
1.2.
Accounting Terms.
Except as otherwise
expressly provided herein, all
accounting terms not otherwise defined herein shall have the
meanings assigned
to them in conformity
with GAAP. Financial
statements
and other information
required to be
delivered by Holdings
to Lenders
pursuant to Section
5.1(a),
5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect at the
time of such
preparation
(and delivered together with the reconciliation
statements provided
for in Section 5.1(e), if applicable). Subject to the
foregoing, calculations in connection with the definitions,
covenants and
other
provisions hereof shall utilize accounting principles and policies
in conformity
with those used to prepare the Historical Financial Statements.
1.3.
Interpretation,
etc. Any of the terms
defined herein may, unless the
context otherwise requires, be used in the singular or the plural,
depending on
the reference.
References herein to any Section, Appendix, Schedule or Exhibit
shall be to a Section,
an Appendix, a
Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically provided. The use herein of the word
"include" or "including", when following any general
statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar
items
or matters, whether or
not non-limiting
language (such as "without limitation"
or "but not limited
to" or words of
similar import) is used with reference
thereto, but rather
shall be deemed to refer to all other items or matters that
fall within the
broadest possible
scope of such
general statement, term or
matter. Unless the
prior written consent
of the Requisite
Lenders is required
hereunder for an amendment, restatement, supplement or other
modification to any
such agreement and such consent is not obtained, references in this
Agreement to
such agreement shall be to such agreement as so amended, restated,
supplemented
or modified.
References
in this Agreement to any statute shall be to such
statute as
amended or modified from time to time and to any successor
legislation thereto, in each case as in effect at the time any such
reference is
operative. The terms
"Lender," "Administrative Agent," "Collateral Agent,"
"Syndication Agent," and "Agent" include, without limitation, their respective
successors.
24
<PAGE>
SECTION 2 TERM
LOANS
2.1.
Term Loan Commitments.
Subject to the terms
and conditions
hereof,
each Lender
severally agrees to make, on the Closing Date, a Term Loan to
Borrower in an amount equal to such Lender's Term Loan Commitment.
Borrower may
make only one
borrowing under the
Term Loan Commitment
which shall be on
the
Closing Date. Any amount borrowed under this Section 2.1 and
subsequently repaid
or prepaid may not be reborrowed. Subject to Sections 2.11 and
2.13, all amounts
owed hereunder
with respect to the Term Loans
shall be paid in full
no later
than the Term Loan
Maturity Date.
Each Lender's
Term Loan Commitment shall
terminate immediately
and without
further action on the Closing Date after
giving effect to the funding of such Lender's Term Loan Commitment
on such date.
2.2.
Borrowing Mechanics for Term Loans.
(a) Borrower shall
deliver to
Administrative Agent a
fully executed
Funding Notice no
later than (i) in the case of Base Rate Loans, 1 Business Day
and (ii) in the case of Eurodollar Rate Loans, 3 Business Days, in each case,
prior to the Closing Date. Promptly upon receipt by Administrative
Agent of such
Funding Notice,
Administrative
Agent shall notify
each Lender of the proposed
borrowing.
(b) Each Lender shall make its Term Loan, as the case may be,
available to Administrative Agent not later than 10:00 p.m. (New
York City time)
on the Closing Date,
by wire transfer of same day funds in Dollars, at the
Principal Office designated by Administrative Agent. Upon
satisfaction or waiver
of the conditions
precedent specified herein, Administrative Agent shall make
the proceeds of the
Term Loans available
to Borrower on the Closing
Date by
causing an amount of same day funds in Dollars equal to the
proceeds of all such
Term Loans received by
Administrative Agent
from Lenders to be credited to the
account of Borrower at the Principal Office designated by
Administrative
Agent
or to such other account as may be designated in writing to
Administrative Agent
by Borrower.
2.3.
Notes. If so requested by any Lender by written
notice to Borrower
(with a copy to
Administrative Agent)
at least two Business
Days prior to the
Closing Date, or at any time thereafter, Borrower shall execute and deliver
to
such Lender (and/or,
if applicable and if
so specified in such notice, to any
Person who is an
assignee of such
Lender pursuant to Section 10.6) on the
Closing Date (or, if such notice is delivered after the Closing Date,
promptly
after Borrower's
receipt of such notice) a Note or Notes to evidence such
Lender's Term Loan.
2.4. Pro Rata Shares; Availability of Funds.
(a) Pro Rata
Shares. All Term Loans shall be made by Lenders
simultaneously and proportionately to their respective Pro Rata
Shares, it being
understood that no
Lender shall be
responsible
for any default by any other
Lender in such other Lender's obligation to make a Term Loan
requested hereunder
nor shall any Term Loan Commitment of any Lender be
increased or decreased as a
result of a default by any other Lender in such other Lender's obligation to
make a Term Loan requested hereunder.
(b) Availability of Funds. Unless Administrative Agent shall have
been
notified by any Lender
prior to the
Closing Date that such Lender does not
intend to make
available to
Administrative Agent
the amount of such
Lender's
Term Loan requested on
the Closing Date,
Administrative Agent
may assume that
such Lender
has made such
amount available to Administrative Agent on the
Closing Date and Administrative Agent may, in its sole discretion,
but shall not
be obligated
to, make available to Borrower a corresponding amount on the
Closing Date.
If such corresponding amount is not in fact made
available to
Administrative Agent
by such Lender,
Administrative Agent shall
25
<PAGE>
be entitled
to recover
such corresponding amount on demand from such
Lender
together with
interest thereon, for each day from the Closing Date
until the
date such amount is paid to Administrative Agent, at the customary rate set
by
Administrative Agent for the correction of errors among banks for
three Business
Days and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount
forthwith upon
Administrative
Agent's demand
therefor,
Administrative
Agent shall
promptly notify Borrower and Borrower shall
immediately pay such corresponding amount to Administrative Agent
together with
interest thereon, for
each day from the Closing Date until the date such amount
is paid to
Administrative Agent,
at the rate payable
hereunder for Base
Rate
Loans. Nothing in this Section 2.4(b) shall be deemed to relieve
any Lender from
its obligation to
fulfill its Term Loan
Commitments hereunder
or to prejudice
any rights that
Borrower may have against any Lender as a result of any default
by such Lender hereunder.
2.5.
Use of Proceeds. The proceeds of the Term Loans
made on the Closing
Date shall be applied by Borrower to fund the Refinancing, to pay the Senior
Notes Interest
Payment, to pay
related transaction
costs and expenses and for
general corporate
purposes of Holdings and its Subsidiaries. No portion of the
proceeds of any Credit
Extension shall be used in any manner
that causes or
might cause such Credit Extension or the application of such
proceeds to violate
Regulation T,
Regulation
U or Regulation X of the Board of Governors or
any
other regulation thereof or to violate the Exchange Act.
2.6.
Evidence of Debt; Register; Lenders' Books and Records.
(a) Lenders'
Evidence of Debt. Each Lender shall maintain on its
internal records an
account or accounts
evidencing the Obligations of Borrower
to such Lender,
including the amounts of the Term Loans made by it and
each
repayment and
prepayment in respect
thereof. Any such recordation shall be
conclusive and binding on Borrower, absent manifest error;
provided, that the
failure to make any such recordation, or any error in such recordation, shall
not affect Borrower's
Obligations in respect
of any applicable Term Loans; and
provided further, in the event of any inconsistency between the
Register and any
Lender's records, the recordations in the Register shall
govern.
(b) Register.
Administrative
Agent (or its agent or sub-agent
appointed by it) shall
maintain at its Principal Office a register for the
recordation of the
names and addresses of Lenders and Term Loans of each Lender
from time to time
(the "Register"). The Register shall be available for
inspection by Borrower or any Lender (with respect to any entry
relating to such
Lender's Term
Loans) at any reasonable time and from time to time upon
reasonable prior notice. Administrative Agent shall record, or
shall cause to be
recorded, in the
Register the Term Loans in accordance with the provisions of
Section 10.6,
and each repayment or prepayment in respect of the principal
amount of the Term
Loans, and any such
recordation
shall be conclusive and
binding on Borrower and each Lender, absent manifest error;
provided, failure to
make any such recordation, or any error in such recordation, shall not affect
Borrower's Obligations
in respect of any Term Loan. Borrower hereby designates
GSCP to serve as
Borrower's agent
solely for purposes of maintaining the
Register as provided in this Section 2.6, and Borrower hereby agrees that, to
the extent GSCP serves in such capacity, and its officers,
directors, employees,
agents, sub-agents and affiliates shall constitute
"Indemnitees."
2.7.
Interest on Term Loans.
(a) Except as otherwise set forth herein, each Term Loan shall bear
interest on the unpaid
principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof as
follows:
(i) if a Base Rate Loan, at the Base Rate plus 11.00% per
annum;
or
26
<PAGE>
(ii) if a Eurodollar
Rate Loan, at the Adjusted Eurodollar Rate
plus 12.00% per annum;
provided, that,
in each case,
each such interest rate shall increase by an
additional 2.00% per
annum on and
following the second anniversary of the
Closing Date.
(b) The basis for determining the rate of interest with respect to
any
Term Loan, and the
Interest Period with
respect to any
Eurodollar Rate
Loan,
shall be selected by Borrower and notified to Administrative Agent and Lenders
pursuant to the applicable Funding Notice or
Conversion/Continuation Notice, as
the case may be ;
provided, until the
date that Syndication Agent notifies
Borrower that the primary syndication of the Term Loans has
been completed, as
determined by
Syndication Agent,
the Term Loans shall
be maintained as either
(1) Eurodollar Rate
Loans having an Interest Period of no longer than one month
or (2) Base Rate Loans. If on any day a Term Loan is outstanding
with respect to
which a Funding Notice or a Conversion/Continuation
Notice has not been
delivered to Administrative Agent in accordance with the terms
hereof specifying
the applicable basis
for determining
the rate of interest,
then for that day
such Term Loan shall be a Base Rate Loan.
(c) In connection with
Eurodollar
Rate Loans there shall
be no more
than five (5) Interest
Periods outstanding
at any time. In the
event Borrower
fails to specify
between a Base Rate Loan or a Eurodollar Rate Loan in the
applicable Funding
Notice or Conversion/Continuation
Notice, such Loan (if
outstanding as a Eurodollar Rate Loan) will be automatically converted into a
Base Rate Loan on the last day of the then-current Interest Period
for such Loan
(or if outstanding
as a Base Rate Loan will remain as, or (if not then
outstanding) will be
made as, a Base Rate Loan). In the event Borrower fails to
specify an
Interest Period for any Eurodollar Rate Loan in the applicable
Funding Notice or
Conversion/Continuation Notice, Borrower shall be deemed to
have selected an
Interest Period of one
month. As soon as
practicable
after
10:00 a.m.
(New York City
time) on each
Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall,
absent manifest
error, be final, conclusive and binding upon all parties) the
interest rate that
shall apply to the
Eurodollar
Rate Loans for which
an interest
rate is then
being determined
for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to
Borrower and
each Lender.
(d) Interest payable
pursuant to Section 2.7(a) shall be computed (i)
in the case of Base Rate Loans on the basis of a 365-day or 366-day
year, as the
case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a
360-day year,
in each case for the
actual number of days elapsed in the period
during which it accrues. In computing interest on any Term Loan,
the date of the
making of such Term Loan or the first day of an Interest
Period applicable to
such Term Loan or,
with respect
to a Base Rate Loan
being converted from a
Eurodollar Rate Loan,
the date of conversion
of such Eurodollar
Rate Loan to
such Base Rate Loan,
as the case may be,
shall be included, and the date of
payment of
such Term Loan or the expiration date of an Interest Period
applicable to such
Term Loan or, with respect to a Base Rate Loan being
converted to a Eurodollar Rate Loan, the date of conversion of such Base Rate
Loan to such
Eurodollar Rate
Loan, as the case may be, shall be excluded;
provided, if a Term
Loan is repaid on the same day on which it is
made, one
day's interest shall be paid on that Term Loan.
(e) Except as otherwise set forth herein, interest on each Term Loan
(i) shall accrue
on a daily
basis and shall be
payable in arrears on each
Interest Payment
Date with respect to interest accrued on and to each such
payment date; (ii) shall accrue on a daily basis and shall be
payable in arrears
upon any prepayment of the Term Loans, whether voluntary or mandatory,
to the
extent accrued on the
amount being prepaid;
and (iii) shall accrue
on a daily
basis and shall be payable in arrears at maturity of the Term Loans, including
final maturity
of the Term
Loans; provided, however, with respect to any
27
<PAGE>
voluntary prepayment
of a Base Rate Loan,
accrued interest shall instead be
payable on the applicable Interest Payment Date.
(f) For purposes of disclosure pursuant to the Interest Act
(Canada),
the annual rates of
interest or fees to which the rates of
interest or fees
provided in this Agreement and the other Credit Documents (and stated herein
or
therein, as
applicable,
to be computed on the basis of a period
of time less
than a calendar year) are equivalent are the rates so
determined multiplied
by
the actual number of
days in the applicable
calendar year and divided by the
number of days in such period of time.
2.8.
Conversion/Continuation.
(a) Subject
to Section 2.18 and so long as no
Default or Event
of
Default shall have
occurred and then be
continuing,
Borrower shall have the
option:
(i) to convert at any time all or any part of any Term Loan
equal
to $5,000,000 and integral multiples of $1,000,000 in excess of
that amount from
one Type of Term Loan to another Type of Term Loan; provided, a Eurodollar Rate
Loan may only be converted on the expiration of the Interest
Period applicable
to such Eurodollar
Rate Loan unless
Borrower shall pay all amounts due
under
Section 2.18 in connection with any such conversion; or
(ii) upon the expiration of any Interest Period applicable to
any
Eurodollar Rate
Loan, to continue all or any portion of such Loan equal to
$5,000,000 and
integral multiples of
$1,000,000 in excess
of that amount as a
Eurodollar Rate Loan.
(b) Borrower
shall deliver a Conversion/Continuation
Notice
to
Administrative Agent
no later than 10:00 a.m. (New York City time) at least one
Business Day in
advance of the proposed conversion date (in the case of a
conversion to a Base
Rate Loan) and at least three Business Days in advance of
the proposed
conversion/continuation date (in the case of a conversion to, or
a
continuation of, a Eurodollar Rate Loan). Except as otherwise
provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any
Eurodollar Rate
Loans (or telephonic notice in lieu thereof) shall be
irrevocable, and
Borrower shall be bound to effect a conversion or continuation
in accordance therewith.
2.9.
Default Interest. Upon the occurrence and during the
continuance of
any Event of Default, the principal amount of all Term Loans
outstanding and, to
the extent permitted by applicable law, any interest payments on the Term Loans
or any fees or other
amounts owed
hereunder, shall
thereafter
bear interest
(including post-petition interest in any proceeding under the
Bankruptcy Code or
other applicable
bankruptcy
laws) payable on demand at a rate that
is 2% per
annum in excess of the interest rate otherwise payable hereunder
with respect to
the applicable
Term Loans (or, in the
case of any such fees and other amounts,
at a rate which is 2% per annum in excess of the interest rate
otherwise payable
hereunder for Base Rate Loans); provided, in the case of
Eurodollar Rate Loans,
upon the expiration
of the Interest Period in effect at the time any such
increase in
interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest
payable upon
demand at a rate which is 2% per annum in excess of the interest
rate otherwise
payable hereunder
for Base Rate Loans.
Payment or acceptance
of the increased
rates of interest provided for in this Section 2.9 is not a permitted
alternative to timely
payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of
Administrative
Agent or any Lender.
2.10. Fees. Borrower agrees to pay to Agents fees in the amounts
and at the
times separately agreed upon.
28
<PAGE>
2.11. Scheduled Payments. The principal amounts of the Term
Loans shall be
repaid in consecutive
quarterly installments
(each, an "Installment") in the
aggregate amounts set forth below on the dates set forth below,
commencing June
30, 2007:
-----------------------------
----------------------------------------
INSTALLMENT PAYMENT DATE
INSTALLMENT AMOUNT
-----------------------------
----------------------------------------
June 30,
2007
$125,000
-----------------------------
----------------------------------------
September
30, 2007
$125,000
-----------------------------
----------------------------------------
December
31, 2007
$125,000
-----------------------------
----------------------------------------
March 31,
2008
$125,000
-----------------------------
----------------------------------------
June 30,
2008
$125,000
-----------------------------
----------------------------------------
September
30, 2008
$125,000
-----------------------------
----------------------------------------
December
31, 2008
$125,000
-----------------------------
----------------------------------------
March 31,
2009
$125,000
-----------------------------
----------------------------------------
June 30,
2009
$125,000
-----------------------------
----------------------------------------
Term Loan
Maturity Date
$48,875,000
-----------------------------
----------------------------------------
Notwithstanding the
foregoing,
(x) such Installments shall be reduced in
connection with any
voluntary or mandatory prepayments of the Term Loans in
accordance with
Sections 2.13, 2.14
and 2.15, as applicable; and (y) the Term
Loans, together with
all other amounts owed
hereunder with respect thereto,
shall, in any event, be paid in full no later than the Term Loan
Maturity Date.
2.12.
Voluntary Prepayments.
(a) Any time and from
time to time:
(1) with respect to Base Rate Loans, Borrower may prepay any
such
Term Loans on any
Business Day in whole
or in part, in an
aggregate minimum
amount of $5,000,000
and integral
multiples of
$1,000,000
in excess of that
amount; and
(2) with respect to
Eurodollar Rate Loans,
Borrower may
prepay
any such Term
Loans on any
Business Day in whole or in part in an
aggregate
minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess
of
that amount;
(b) All such
prepayments shall be made:
(1) upon not less
than one Business Day's prior written or
telephonic notice in the case of Base Rate Loans; and
(2) upon not less than
three Business
Days' prior written or
telephonic notice in the case of Eurodollar Rate Loans;
in each case given to Administrative Agent by 12:00 p.m. (New York
City time) on
the date required and, if given by telephone, promptly confirmed in writing to
Administrative Agent
(and Administrative
Agent will
promptly transmit such
telephonic or original
notice for Term Loans by telefacsimile or telephone to
each Lender). Upon the
giving of any such notice, the principal amount of the
Term Loans
specified in such notice shall become due and payable on the
prepayment date
specified therein. Any such voluntary prepayment shall be
applied as specified in Section 2.15.
29
<PAGE>
2.13. Mandatory Prepayments.
(a) Asset Sales. No
later than the third
Business Day following
the date of receipt by Holdings or any of its Subsidiaries of any
Net Asset Sale
Proceeds, Borrower
shall prepay the Term
Loans as set forth in Section 2.15 in
an aggregate amount
equal to such Net
Asset Sale Proceeds;
provided, (i) no
Default or Event of Default shall have occurred and be continuing, and (ii) to
the extent that
aggregate Net Asset
Sale Proceeds do not
exceed $500,000
per
annum, Borrower
shall have the option,
directly or through
one or more of its
Subsidiaries, to
invest Net Asset Sale Proceeds within one hundred eighty days
of receipt thereof in
long-term productive
assets of the general
type used in
the business of Borrower and its Subsidiaries; provided, however, that pending
such investment
all such Net Asset Sale Proceeds shall be held in a Cash
Collateral Account.
(b)
Insurance/Condemnation
Proceeds. No later
than the third
Business Day
following the date of receipt by Holdings or any of its
Subsidiaries, or Collateral Agent as loss payee, of any Net
Insurance/Condemnation Proceeds with respect to Fixed Asset
Collateral, Borrower
shall prepay the Term Loans as set forth in Section 2.15 in an
aggregate amount
equal to such Net Insurance/Condemnation Proceeds; provided, (i) no Default or
Event of Default shall have occurred and be continuing, (ii) no
Material Adverse
Effect has resulted or could reasonably be expected to result
from such loss of
Fixed Asset
Collateral,
and (iii) to the extent that aggregate Net
Insurance/Condemnation
Proceeds with respect to Fixed Asset Collateral from the
Closing Date
through the applicable date of determination do not exceed
$500,000, Borrower shall have the option, directly or through one
or more of its
Subsidiaries to invest
such Net Insurance/Condemnation
Proceeds within one
hundred eighty days of
receipt thereof in
long term productive
assets of the
general type used in
the business
of Holdings and its Subsidiaries, which
investment may include the repair, restoration or replacement of the
applicable
assets thereof;
provided, however, that pending such investment all
such Net
Insurance/Condemnation Proceeds shall be held in a Cash Collateral
Account.
(c) Issuance
of Equity Securities. On the date of receipt by
Holdings of any Cash proceeds from a capital contribution to, or
the issuance of
any Capital Stock of, Holdings or any of its Subsidiaries (other than pursuant
to any employee stock or stock option compensation plan),
Borrower shall
prepay
the Term Loans as set forth in Section 2.15 in an aggregate
amount equal to
50%
of such proceeds,
net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including reasonable legal
fees and expenses.
(d) Issuance of Debt.
On the date of receipt
by Holdings or any
of its Subsidiaries of any Cash proceeds from the incurrence of any
Indebtedness
of Holdings
or any of its Subsidiaries (other than with respect to any
Indebtedness permitted
to be incurred pursuant to Section 6.1), Borrower shall
prepay the Term Loans as set forth in Section 2.15 in an aggregate
amount equal
to 100% of such proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith, including reasonable
legal fees and expenses.
(e) Consolidated
Excess Cash Flow. In the event that (commencing
in the Fiscal Year ending December 31, 2008) there shall be
Consolidated
Excess
Cash Flow for any prior Fiscal Year, Borrower shall, no later than ninety
days
after the end of the prior Fiscal Year, prepay the Term Loans as set forth
in
Section 2.15 in an aggregate amount equal to (i) 75% of such
Consolidated Excess
Cash Flow minus (ii)
voluntary repayments
of the Term Loans
during such prior
Fiscal Year.
(f) Extraordinary Tax Receipts. No later than the third
Business
Day following the date of receipt by Holdings or any of its
Subsidiaries of
any
Cash proceeds
from any United States, State, local or foreign tax refund
received outside of
the ordinary course of business, Borrower shall prepay the
30
<PAGE>
Term Loans as set forth in Section 2.15 in an aggregate
amount equal to 100%
of
such proceeds,
net of reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses.
(g) Prepayment
Certificate.
Concurrently with any prepayment of
the Term Loans
pursuant to Sections
2.13(a) through
2.13(f), Borrower shall
deliver to
Administrative
Agent
a certificate of an Authorized Officer
demonstrating the
calculation
of the amount of the
applicable net proceeds or
Consolidated Excess
Cash Flow, as the case
may be. In the event that Borrower
shall subsequently determine that the actual amount received
exceeded the amount
set forth in such
certificate,
Borrower shall promptly make an additional
prepayment of the Term
Loans in an amount
equal to such excess,
and Borrower
shall concurrently therewith deliver to Administrative Agent a
certificate of an
Authorized Officer demonstrating the derivation of such excess.
2.14. Call Premium.
In the event all or
any portion of the Term Loans are
prepaid voluntarily
or pursuant
to Section
2.13(c) or (d) prior
to the first
anniversary of the Closing Date, such prepayments will be made at 101.0%
of the
principal amount repaid.
2.15. Application of Prepayments.
(a) Application of Voluntary Prepayments. Any prepayment of Term
Loans
pursuant to (i)
Section 2.12 shall be
applied among the
remaining scheduled
installments thereof
as directed by Borrower in the applicable notice of
prepayment and (ii)
Section 2.13 shall be applied pro rata to the remaining
scheduled installments thereof.
(b) Application of
Prepayments to Base Rate Loans and Eurodollar Rate
Loans. Any prepayment of Term Loans shall be applied first to Base
Rate Loans to
the full extent thereof before application to Eurodollar Rate Loans, in each
case in a manner which minimizes the amount of any payments
required to be
made
by Borrower pursuant to Section 2.18(c).
2.16. General Provisions Regarding Payments.
(a) All payments by Borrower of principal, interest, fees and other
Obligations shall be made in Dollars in same day funds, without
defense, setoff
or counterclaim,
free of any restriction or condition, and delivered to
Administrative Agent
not later than 12:00 p.m. (New York City time) on the date
due at the Principal Office designated by Administrative Agent for the account
of Lenders; for
purposes of computing
interest and fees, funds received by
Administrative Agent
after that time on such due date shall
be deemed to have
been paid by Borrower on the next succeeding Business Day.
(b) All payments in respect of the principal amount of any Term Loan
shall be accompanied
by payment of accrued
interest on the
principal amount
being repaid or prepaid.
(c) Administrative
Agent (or its agent or sub-agent appointed by it)
shall promptly
distribute
to each Lender at such
address as such Lender shall
indicate in writing, such Lender's applicable Pro Rata Share of all
payments and
prepayments of
principal and interest
due hereunder,
together with all
other
amounts due thereto,
including,
without limitation, all fees payable with
respect thereto, to the extent received by Administrative
Agent.
(d)
Notwithstanding
the foregoing
provisions
hereof,
if any
Conversion/ Continuation Notice is withdrawn as to any Affected
Lender or if any
Affected Lender
makes Base Rate Loans in lieu of its Pro Rata
Share of any
Eurodollar Rate
Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
31
<PAGE>
(e) Whenever any payment to be made hereunder with respect to any
Term
Loan shall be stated to be due on a day that is not a Business Day,
such payment
shall be made on the next succeeding Business Day.
(f) Borrower
hereby authorizes Administrative Agent to charge
Borrower's accounts with Administrative Agent in order to cause timely
payment
to be made to Administrative Agent of all principal, interest, fees
and expenses
due hereunder (subject
to sufficient funds
being available in its accounts for
that purpose).
(g) Administrative
Agent shall deem any payment by or on behalf of
Borrower hereunder
that is not made in
same day funds prior to 12:00 p.m. (New
York City time) to be a non-conforming payment. Any such payment shall (except
for the purpose
of Section 8.1(a)) not be deemed to have been
received by
Administrative Agent until the later of (i) the time such funds
become available
funds, and (ii) the
applicable next
Business Day.
Administrative Agent
shall
give prompt telephonic
notice to Borrower and each applicable Lender (confirmed
in writing) if any payment is non-conforming. Interest shall continue to
accrue
on any principal as to which a non-conforming payment is made until such
funds
become available
funds (but in no event
less than the period
from the date of
such payment
to the next succeeding applicable Business Day) at the rate
determined pursuant to Section 2.9 from the date such amount was
due and payable
until the date such amount is paid in full.
(h) If an Event of Default shall have occurred and be continuing
and
not otherwise been waived, and the maturity of the
Obligations shall have
been
accelerated pursuant
to Section 8.1, Borrower agrees that Administrative Agent
may, subject
to the provisions of the Intercreditor Agreement, deliver a
Blockage Notice to each Deposit Account Bank for each Approved
Deposit Account
and all funds on
deposit in any Cash Collateral Account and all other all
payments or
proceeds received by Agents hereunder in respect of any of the
Obligations, shall, subject to the provisions of the Intercreditor
Agreement, be
applied in accordance with the application arrangements described
in Section 7.2
of the Pledge and Security Agreement.
2.17. Ratable Sharing.
Lenders hereby agree
among themselves that, except
as otherwise
provided in the Collateral Documents with respect to amounts
realized from the exercise of rights with respect to Liens on the
Collateral, if
any of them
shall, whether by voluntary payment (other than a voluntary
prepayment of Term Loans made and applied in accordance
with the terms
hereof),
through the exercise of any right of set-off or banker's
lien, by counterclaim
or cross action or by the enforcement of any right under the Credit
Documents or
otherwise, or as
adequate protection of
a deposit treated as
cash collateral
under the Bankruptcy
Code, receive payment
or reduction of a proportion of the
aggregate amount of
principal,
interest, fees and other amounts then due
and
owing to such Lender hereunder or under the other Credit Documents
(collectively, the "Aggregate Amounts Due" to such Lender) which is
greater than
the proportion
received by any other Lender in respect of the Aggregate
Amounts
Due to such other Lender, then the Lender receiving such
proportionately greater
payment shall (a)
notify Administrative Agent and each other Lender of the
receipt of such
payment and (b) apply a portion of such
payment to
purchase
participations (which it shall be deemed to have purchased from
each seller of a
participation
simultaneously upon
the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Lenders so
that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders
in proportion
to the Aggregate
Amounts Due to them; provided, if all or part of such
proportionately greater payment received by such purchasing Lender
is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Borrower or
otherwise, those
purchases shall be
rescinded and the purchase prices paid for
such participations
shall be returned to
such purchasing Lender ratably to the
extent of such recovery, but without interest. Borrower expressly consents to
the foregoing
arrangement
and agrees
that any holder of a
participation
so
purchased may
exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by Borrower
to that holder
32
<PAGE>
with respect
thereto as fully as if that holder were owed the amount of the
participation held by that holder.
2.18.
Making or Maintaining Eurodollar Rate Loans.
(a) Inability to Determine Applicable Interest Rate. In the event
that
Administrative Agent
shall have determined (which determination shall be final
and conclusive
and binding
upon all parties
hereto), on any Interest Rate
Determination Date
with respect to any Eurodollar Rate Loans, that by reason of
circumstances
affecting the London
interbank market adequate and fair means do
not exist for
ascertaining the
interest rate
applicable to such Term Loans on
the basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent
shall on such date
give notice (by
telefacsimile
or by
telephone
confirmed in
writing) to Borrower and each Lender of such
determination,
whereupon (i) no Term
Loans may be made as,
or converted
to,
Eurodollar Rate Loans until such time as Administrative
Agent notifies
Borrower
and Lenders that the
circumstances giving
rise to such notice no longer exist,
and (ii) any Funding Notice or Conversion/Continuation Notice given by Borrower
with respect to the Loans in respect of which such determination was made shall
be deemed to be rescinded by Borrower.
(b) Illegality or
Impracticability of
Eurodollar Rate Loans.
In the
event that on any date any Lender shall have determined (which determination
shall be final and
conclusive and binding
upon all parties hereto but shall be
made only after
consultation with Borrower and Administrative Agent) that the
making, maintaining or
continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result
of compliance
by such Lender in good
faith with any law,
treaty, governmental
rule, regulation, guideline or order (or would
conflict
with any such treaty,
governmental
rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith
would not be
unlawful), or (ii)
has become impracticable, as a result of contingencies
occurring after the date hereof which materially and adversely
affect the London
interbank market or the position of such Lender in that market,
then, and in any
such event, such
Lender shall be an "Affected Lender" and it shall on that
day
give notice (by telefacsimile or by telephone confirmed in writing) to
Borrower
and Administrative
Agent of such
determination
(which notice
Administrative
Agent shall
promptly transmit to each other Lender). Thereafter (1) the
obligation of the
Affected Lender to make Term Loans as, or
to convert
Term
Loans to, Eurodollar
Rate Loans shall be
suspended until such
notice shall be
withdrawn by the Affected Lender, (2) to the extent such
determination by
the
Affected Lender
relates to a Eurodollar Rate Loan then being requested by
Borrower pursuant to a Funding Notice or a Conversion/Continuation
Notice, the
Affected Lender shall
make such Term Loan as (or continue such Term Loan as or
convert such
Term Loan to, as the case may be) a Base
Rate Loan, (3) the
Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans
(the "Affected
Term Loans") shall be
terminated at the earlier to occur of the
expiration of the
Interest Period then in effect with respect
to the Affected
Term Loans or when
required by law,
and (4) the
Affected Term Loans shall
automatically convert
into Base Rate Loans on the date of such
termination.
Notwithstanding the
foregoing,
to the extent a
determination
by an Affected
Lender as described above relates to a Eurodollar Rate Loan then
being requested
by Borrower pursuant
to a Funding Notice or a Conversion/Continuation
Notice,
Borrower shall have the option, subject to the provisions of
Section 2.18(c), to
rescind such Funding Notice or Conversion/Continuation Notice as to all Lenders
by giving notice (by
telefacsimile
or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the
Affected Lender
gives notice of its determination as described above (which notice
of rescission
Administrative Agent
shall promptly
transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this Section
2.18(b)
shall affect the obligation of any Lender other than an Affected
Lender to make
or maintain Term Loans as, or to convert Term Loans to, Eurodollar
Rate Loans in
accordance with the terms hereof.
(c) Compensation for Breakage or Non-Commencement of Interest
Periods.
Borrower shall
compensate
each Lender,
upon written request by such Lender
(which request shall set
33
<PAGE>
forth the basis for requesting such amounts), for all reasonable losses,
expenses and liabilities (including any interest paid by
such Lender to Lenders
of funds borrowed by it to make or carry its Eurodollar Rate Loans
and any loss,
expense or liability sustained by such Lender in connection with
the liquidation
or re-employment of such funds but excluding loss of anticipated
profits) which
such Lender may
sustain: (i) if for any reason (other than a default by such
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Funding Notice or a telephonic request for
borrowing, or
a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a
date specified
therefor in a
Conversion/Continuation Notice or a telephonic
request for
conversion
or continuation; (ii) if any prepayment or other
principal payment of,
or any conversion of,
any of its Eurodollar
Rate Loans
occurs on a date prior to the last day of an Interest Period
applicable to that
Loan; or (iii) if any prepayment of any of its Eurodollar Rate
Loans is not made
on any date specified in a notice of prepayment given by
Borrower.
(d) Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar
Rate Loans at, to, or
for the account of any of its branch
offices or the office of an Affiliate of such Lender.
(e) Assumptions
Concerning
Funding
of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this Section
2.18 and under
Section 2.19 shall be made as though such Lender had actually
funded each of its
relevant Eurodollar
Rate Loans
through the purchase
of a Eurodollar
deposit
bearing interest at
the rate obtained
pursuant to clause (i) of the definition
of Adjusted Eurodollar
Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant
Interest Period
and
through the transfer of such Eurodollar deposit from an offshore office of
such
Lender to a domestic
office of such
Lender in the United
States of America;
provided, however, each Lender may fund each of its Eurodollar Rate
Loans in any
manner it sees fit and the foregoing assumptions shall be utilized only
for the
purposes of
calculating
amounts payable under this Section 2.18 and under
Section 2.19.
2.19.
Increased Costs; Capital Adequacy.
(a) Compensation
For Increased Costs and Taxes. Subject to the
provisions of Section
2.20 (which
shall be controlling with respect to the
matters covered
thereby), in the event
that any Lender shall determine (which
determination shall,
absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental
rule, regulation
or order, or any
change therein or in
the interpretation,
administration
or
application thereof
(including
the introduction of any new law, treaty or
governmental rule,
regulation or order),
or any determination of a court or
governmental
authority, in each
case that becomes effective after the date
hereof (in the case of each Lender listed on the signature pages hereof on the
Closing Date) or after the effective date of the Assignment
Agreement pursuant
to which such Lender
became a Lender (in
the case of each other
Lender), or
compliance by such
Lender with any
guideline, request or
directive issued
or
made after the date hereof (in the case of each Lender listed on the signature
pages hereof on the Closing Date) or after the effective
date of the
Assignment
Agreement pursuant
to which such
Lender became a Lender (in the case of
each
other Lender) by any central bank or other governmental or quasi-governmental
authority (whether or not having the force of law): (i) subjects
such Lender (or
its applicable lending
office) to any additional Tax (other than any Tax on the
overall net income of such Lender) with respect to this
Agreement or any of
the
other Credit Documents or any of its obligations hereunder or thereunder or any
payments to such
Lender (or its applicable lending office) of principal,
interest, fees or any other amount payable hereunder; (ii) imposes, modifies or
holds applicable any reserve (including any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC insurance
or
similar requirement
against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit
extended by, or
any other acquisition
of funds by, any
office of such
34
<PAGE>
Lender (other
than any such
reserve or other requirements with respect to
Eurodollar Rate
Loans that are reflected in the definition of Adjusted
Eurodollar Rate); or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable
lending office)
or its obligations
hereunder or the London interbank market; and the result of
any of the foregoing is to increase the cost to such Lender of
agreeing to make,
making or maintaining
Term Loans hereunder
or to reduce any amount received or
receivable by such
Lender (or its
applicable
lending office) with respect
thereto; then, in any
such case, Borrower
shall promptly pay to such Lender,
upon receipt of the statement referred to in the next sentence,
such additional
amount or amounts (in the form of an increased rate of, or a
different method of
calculating, interest
or otherwise as such Lender in its sole discretion shall
determine) as may be necessary to compensate such Lender for any such
increased
cost or reduction in amounts received or receivable hereunder. Such
Lender shall
deliver to Borrower (with a copy to Administrative Agent) a written statement,
setting forth in
reasonable detail the
basis for calculating
the additional
amounts owed to such Lender under this Section 2.19(a), which
statement shall be
conclusive and binding upon all parties hereto absent manifest
error.
(b) Capital Adequacy
Adjustment.
In the event that any
Lender shall
have determined
that the adoption,
effectiveness,
phase-in or
applicability
after the Closing Date of any law, rule or regulation (or any
provision thereof)
regarding capital
adequacy, or any
change therein or in the interpretation or
administration thereof by any Governmental Authority, central bank
or comparable
agency charged with the interpretation or administration
thereof, or
compliance
by any Lender (or its applicable lending office) with any
guideline, request
or
directive regarding capital adequacy (whether or not having the
force of law) of
any such Governmental Authority, central bank or comparable agency,
has or would
have the effect of reducing the rate of return on the capital
of such Lender or
any corporation
controlling such
Lender as a consequence of, or with reference
to, such Lender's
Term Loans or
participations
therein or other
obligations
hereunder with respect to the Term Loans to a level below that
which such Lender
or such controlling
corporation
could have
achieved but for such adoption,
effectiveness,
phase-in,
applicability, change
or compliance (taking into
consideration the
policies of such Lender or such controlling corporation with
regard to capital
adequacy), then from
time to time, within five Business Days
after receipt by Borrower from such Lender of the statement
referred to in the
next sentence,
Borrower shall pay to such Lender such additional amount or
amounts as will
compensate such Lender
or such controlling
corporation on an
after-tax basis for such reduction. Such Lender shall deliver to
Borrower (with
a copy to Administrative Agent) a written statement, setting forth
in reasonable
detail the basis for
calculating the
additional
amounts owed to Lender
under
this Section 2.19(b),
which statement shall
be conclusive and binding upon all
parties hereto absent manifest error.
2.20.
Taxes; Withholding, etc.
(a) Payments
to Be Free and
Clear. All sums payable by any Credit
Party hereunder and under the other Credit Documents shall (except
to the extent
required by law) be
paid free and clear
of, and without any deduction or
withholding on account
of, any Tax (other
than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by
or within the
United States of America or any political subdivision in or of the
United States
of America or any other jurisdiction from or to which a payment is
made by or on
behalf of any Credit Party or by any federation or organization of which the
United States of
America or any such
jurisdiction
is a member at the
time of
payment.
(b) Withholding of
Taxes. If any Credit
Party or any other Person is
required by law to make any deduction or withholding on account of any such
Tax
from any sum paid or
payable by any
Credit Party to Administrative Agent,
Collateral Agent or any Lender under any of the Credit Documents: (i) Borrower
shall notify
Administrative Agent
of any such requirement or any change in any
such requirement
as soon as Borrower
becomes aware of it;
(ii) Borrower shall
pay any such Tax before the date on which penalties attach thereto,
such payment
to be made (if the
liability to pay is imposed on any
35
<PAGE>
Credit Party)
for its own account or (if that liability is imposed on
Administrative Agent,
Collateral Agent or
such Lender, as the
case may be) on
behalf of and in the
name of Administrative
Agent, Collateral Agent or such
Lender; (iii) the sum
payable by such Credit Party in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the
extent necessary to ensure that, after the making of that
deduction, withholding
or payment,
Administrative Agent,
Collateral Agent or such Lender, as the case
may be, receives on
the due date a net sum equal to what it would have received
had no such deduction,
withholding
or payment been
required or made; and (iv)
within thirty days after paying any sum from which it is required
by law to make
any deduction
or withholding, and within thirty days after the due date of
payment of any Tax which it is required by clause (ii) above to pay, Borrower
shall deliver
to Administrative Agent evidence satisfactory to the other
affected parties of such deduction, withholding or payment and of
the remittance
thereof to the relevant taxing or other authority; provided, no such additional
amount shall be
required to be paid to any Lender
under clause (iii) above
except to the extent that any change after the date hereof (in the case
of each
Lender listed on the
signature pages hereof on the Closing Date)
or after the
effective date of the Assignment Agreement pursuant to which such
Lender became
a Lender (in the case
of each other
Lender) in any such requirement for a
deduction, withholding
or payment as is
mentioned therein
shall result in an
increase in the rate
of such deduction,
withholding
or payment
from that in
effect at the date hereof or at the date of such Assignment Agreement, as the
case may be, in respect of payments to such Lender.
(c) Evidence of Exemption From U.S. Withholding Tax. Each Lender
that
is not a United States Person (as such term is defined in Section
7701(a)(30) of
the Internal
Revenue Code) for U.S. federal income tax purposes (a "Non-US
Lender") shall deliver to Administrative Agent for transmission to
Borrower, on
or prior to the Closing Date (in the case of each Lender listed on
the signature
pages hereof on the Closing Date) or on or prior to the date
of the Assignment
Agreement pursuant
to which it
becomes a Lender (in the case of each other
Lender), and at such
other times as may be
necessary in the
determination of
Borrower or
Administrative
Agent (each in the reasonable exercise of its
discretion):
(i) two original copies of Internal Revenue Service Form W-8BEN,
W-8ECI or W-8IMY (or any successor forms), properly completed and duly
executed
by such Lender, and such other documentation required under the
Internal Revenue
Code and reasonably
requested by Borrower
to establish that such Lender is not
subject to deduction or withholding of United States federal income tax with
respect to any
payments to such Lender of principal, interest, fees or other
amounts payable under any of the Credit Documents; or
(ii) if such Lender is claiming the benefits of the exemption
for
portfolio interest
under section
881(c) of the Internal
Revenue Code,
(x) a
certificate in the form of Exhibit F to the effect that such Lender
is not (A) a
"bank" within the meaning of section 881(c)(3)(A) of the Code, (B)
a "10 percent
shareholder" of the Borrower within the meaning of section
871(h)(3)(B) of
the
Internal Revenue
Code, or (C) a
"controlled foreign
corporation"
related to
Borrower as described in section 881(c)(3)(C) of the Internal
Revenue Code; (y)
duly completed copies of Internal Revenue Service Form W-8BEN;
and (z) and such
other documentation
required under the Internal Revenue Code and reasonably
requested by Borrower to establish that such Lender is not subject to
deduction
or withholding of
United States federal income tax with respect to any payments
to such Lender of interest payable under any of the Credit
Documents.
Each Lender
required to promptly deliver any forms, certificates or other
evidence with respect to United States federal income tax withholding matters
pursuant to this
Section 2.20(c)
hereby agrees, from time to time after the
initial delivery by
such Lender of such forms, certificates or other
evidence,
whenever a
lapse in time or change in circumstances renders such forms,
certificates or other evidence obsolete or inaccurate in any
material respect,
that such Lender shall promptly deliver to Administrative Agent
for
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transmission to
Borrower two new original copies of Internal Revenue Service
Form W-8BEN, W-8ECI or W-8IMY, or the Certificate described in
clause (ii) above
and two original
copies of Internal Revenue Service Form W-8BEN (or any
successor form),
as the case may be,
properly completed and duly executed by
such Lender, and such
other documentation
required under the
Internal Revenue
Code and reasonably
requested by Borrower to confirm or
establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to payments to such Lender under the Credit Documents,
or notify Administrative Agent and Borrower of its inability to
deliver any such
forms, certificates or other evidence. Borrower shall not be
required to pay any
additional amount to any Non-US Lender under Section 2.20(b)(iii)
if such Lender
shall have failed (1)
to deliver the
forms, certificates or other evidence
referred to in this Section 2. 20(c), or (2) to notify Administrative Agent and
Borrower of its
inability to deliver any such forms, certificates or other
evidence, as the case
may be; provided, if such Lender shall have satisfied the
requirements of this
Section 2.20(c) on the
Closing Date or on the date of the
Assignment Agreement
pursuant to which it became a Lender, as applicable,
nothing in this last sentence of Section 2.20(c) shall relieve Borrower of its
obligation to pay any additional amounts pursuant this Section 2.20
in the event
that, as a result of any change in any applicable law, treaty or governmental
rule, regulation or
order, or any change in the interpretation, administration
or application
thereof, such Lender
is no longer properly
entitled to deliver
forms, certificates or other evidence at a subsequent date
establishing the fact
that such Lender is not subject to withholding as described
herein
(d) Treatment of Certain Refunds. If the Administrative Agent or any
Lender in its sole
discretion determines
that it has received a
refund of any
Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower has paid additional amounts pursuant to this Agreement,
it
shall pay to the Borrower an amount equal to such refund (but only
to the extent
of indemnity payments
made, or additional
amounts paid, by such Borrower under
this Agreement with respect to the Taxes giving rise to such
refund), net of all
reasonable out-of-pocket expenses of the Administrative Agent or
such Lender, as
the case may be, and
without interest
(other than any interest paid by the
relevant Governmental Authority with respect to such refund),
provided that the
Borrower, upon the
request of the Administrative Agent, or such Lender, agrees
to repay the amount paid over to the Borrower (plus any
penalties,
interest or
other charges
imposed
by the relevant Governmental Authority) to the
Administrative Agent
or such Lender in the
event the
Administrative Agent
or
such Lender is required to repay such refund to such Governmental Authority.
This subsection shall
not be construed to require the Administrative Agent or
any Lender to apply for any such refund of Taxes or to make
available its tax
returns (or
any other information relating to its taxes that it deems
confidential) to the Borrower or any other Person.
2.21. Obligation
to Mitigate.
Each Lender
agrees that, as promptly as
practicable after the
officer of such Lender
responsible for administering its
Term Loans becomes
aware of the
occurrence
of an event or the
existence of a
condition that would
cause such
Lender to become an
Affected Lender or that
would entitle such Lender to receive payments under Section 2.18, 2.19
or 2.20,
it will, to the extent
not inconsistent
with the internal policies of such
Lender and any
applicable legal or
regulatory
restrictions,
use reasonable
efforts to (a) make or maintain its Credit Extensions, including any Affected
Term Loans,
through another office of such Lender, or (b) take such other
measures as such
Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected
Lender would cease
to exist or the additional amounts which would otherwise be
required to be paid
to such Lender
pursuant to Section 2.18, 2.19 or 2.20 would be materially
reduced and if, as determined by such Lender in its sole
discretion, the
making
or maintaining
of such Term Loans
through such other
office or in
accordance
with such other
measures, as the case
may be, would not
otherwise adversely
affect such Term Loans or the interests of such Lender;
provided, such Lender
will not be obligated to utilize such other office pursuant to this
Section 2.21
unless Borrower agrees to pay all incremental expenses incurred by such Lender
as a result of utilizing such other office as described
above.
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A certificate as to the amount of any such expenses payable by
Borrower pursuant
to this Section
2.21 (setting forth in reasonable detail the basis for
requesting such
amount) submitted
by such Lender to
Borrower (with a copy
to
Administrative Agent) shall be conclusive absent manifest
error.
2.22. Removal or Replacement of a Lender. Anything contained herein to
the
contrary
notwithstanding,
in the event that: (a) (i) any Lender (an
"Increased-Cost
Lender") shall give
notice to Borrower
that such Lender is an
Affected Lender or
that such Lender is
entitled to receive payments under
Section 2.18 (other than Section 2.19 or 2.20, (ii) the
circumstances which have
caused such
Lender to be an
Affected Lender or
which entitle
such Lender to
receive such payments
shall remain in effect, and (iii) such Lender shall
fail
to withdraw such notice within five Business Days after
Borrower's
request for
such withdrawal; or (b) in connection with any proposed amendment,
modification,
termination, waiver or
consent with respect to any of the provisions hereof as
contemplated by
Section 10.5(b),
the consent of
Requisite Lenders
shall have
been obtained
but the consent of one or more of such other
Lenders (each a
"Non-Consenting Lender") whose consent is required shall not have
been obtained;
then, with respect to each such Increased-Cost Lender or Non-Consenting
Lender
(each a "Terminated
Lender"), Borrower may, by giving written notice to
Administrative Agent
and any Terminated
Lender of its election to do so, elect
to cause such Terminated Lender (and such Terminated Lender hereby irrevocably
agrees) to assign its
outstanding
Term Loans in full to
one or more
Eligible
Assignees (each a
"Replacement
Lender") in accordance
with the provisions
of
Section 10.6 and Borrower shall pay the fees, if any, payable thereunder in
connection with
any such assignment; provided, (1) on the date of such
assignment, the
Replacement
Lender shall pay to
Terminated
Lender an amount
equal to the sum of principal of, and all accrued interest on, all outstanding
Term Loans
of the Terminated Lender; (2) on the date of such assignment,
Borrower shall pay any amounts payable to such Terminated Lender pursuant to
Section 2.18(c),
2.19 or 2.20; or
otherwise as if it were a prepayment and (3)
in the event such Terminated Lender is a Non-Consenting Lender,
each Replacement
Lender shall consent, at the time of such assignment, to each matter in respect
of which such Terminated Lender was a Non-Consenting Lender. Upon
the prepayment
of all amounts
owing to any
Terminated
Lender and the termination of such
Terminated Lender's
Term Loan Commitments, such Terminated Lender shall no
longer constitute a "Lender" for purposes hereof; provided, any rights of such
Terminated Lender
to indemnification hereunder shall survive as to such
Terminated Lender.
Each Lender agrees
that, if it becomes a
Terminated Lender and
its rights and
claims are assigned
hereunder to a Replacement Lender pursuant to this
Section
2.22, it shall
execute and deliver to Administrative Agent an Assignment
Agreement to evidence
such assignment, together with any Note (if such Term
Loans are evidenced by a Note) evidencing the Term Loans subject to such
Assignment Agreement;
provided, however, that the failure of any
Terminated
Lender to execute an
Assignment Agreement
shall not render such assignment
invalid.
SECTION 3. CONDITIONS
PRECEDENT
3.1.
Closing Date. The obligation of each Lender to make a Credit
Extension
on the Closing Date is subject to the satisfaction, or waiver in
accordance with
Section 10.5, of the following conditions on or before the Closing
Date:
(a) Credit
Documents.
Administrative
Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable
Credit Party for each
Lender and the
Intercreditor
Agreement
executed and delivered by each other party thereto.
(b) Organizational Documents; Incumbency. Administrative Agent shall
have received (i) sufficient copies of each Organizational Document
executed and
delivered by each Domestic Credit Party and Fedders Canada, as
applicable, and,
to the extent
applicable,
certified as of a recent date
38
<PAGE>
by the appropriate
governmental
official, for each Lender, each dated the
Closing Date or a
recent date prior
thereto; (ii)
signature and incumbency
certificates of the
officers of such Person executing the Credit Documents to
which it is a party;
(iii) resolutions
of the Board of
Directors or similar
governing body of each Domestic Credit Party and Fedders
Canada approving and
authorizing the
execution, delivery
and performance of
this Agreement and the
other Credit
Documents to which it
is a party or by which it or its assets may
be bound as of the Closing Date, certified as of the Closing Date by its
secretary or an
assistant secretary as
being in full force and effect without
modification or amendment; (iv) a good standing certificate or equivalent from
the applicable
Governmental
Authority of the respective jurisdiction of
incorporation,
organization or
formation of each Domestic Credit Party and
Fedders Canada, and in
each jurisdiction in
which it is qualified as a foreign
corporation or other
entity to do business
(to the extent that
the failure to
maintain good standing in such jurisdiction could reasonably be
expected to have
a Material Adverse Effect), each dated a recent date prior to
the Closing Date;
and (v) such other documents as Administrative Agent may reasonably
request.
(c) Organizational and Capital Structure. The organizational
structure
and capital structure of Holdings and its Subsidiaries, shall be as
set forth on
Schedule 4.1.
(d) Revolving Credit
Facility.
Administrative Agent
and Syndication
Agent shall have received reasonably satisfactory evidence that, concurrently
with the occurrence of the Closing Date and the Credit Extensions
hereunder, the
"Closing Date" (under and as defined in the Revolving Credit Agreement) shall
have occurred
and Administrative Agent shall have received copies of the
executed Revolving
Credit Agreement and
other Revolving Credit Documents which
shall be in
form and substance satisfactory to Administrative Agent and
Syndication Agent.
(e) Refinanced
Indebtedness.
On the Closing Date,
Holdings and its
Subsidiaries shall
have (i) completed th
